Peloton Interactive (PTON) shares surged more than 10% in early trading Thursday and were up 2% as of 10:00 a.m. ET after announcing a five-year partnership with Lululemon (LULU).

As part of the deal, Peloton will offer exclusive digital fitness content to the athletic apparel company, while Lululemon will become Peloton's primary apparel provider. Peloton plans to start selling co-branded merchandise next month, and Lululemon said its Studio All-Access members will be able to access thousands of Peloton classes starting in November.

The move could boost Peloton's popularity at a time when demand for its subscriptions has waned after skyrocketing during the pandemic. Despite a 4% rise in connected fitness subscribers in its 2023 fiscal year, Peloton lost 29,000 subscribers in the fourth quarter. Peloton's partnership could also help Lululemon expand its presence in the at-home fitness market.

“In the months ahead, we look forward to bringing this partnership to life with Peloton and leveraging the strengths of both brands to further support our growing guest and member communities on their fitness and wellbeing journeys,” said Lululemon Americas and Global Guest Innovation President Celeste Burgoyne in a release.

Lululemon shares were little changed following the news, but were up over 17% year-to-date. Despite Thursday's gains, Peloton shares have lost about two-fifths of their value so far this year.

Correction—Sept. 28, 2023, 10:30 a.m. ET: A previous version of this article misstated Peloton's fourth quarter and full fiscal year subscriber growth.