Japanese lingerie company Wacoal International on Wednesday announced that it has acquired intimates startup Lively for "$85 million to start, with up to an additional $55 million in performance-based payouts," according to an email from the company to Retail Dive.
Founded in 1949, Wacoal has been operating in the U.S. for 34 years, mostly selling through department stores and other retailers, according to a company press release emailed to Retail Dive. Lively will continue to operate separately, and Lively Founder and CEO Michelle Cordeiro Grant will remain in her role.
The companies' customer demographics differ, with Wacoal's trending older and Lively's younger, so together they can achieve growth, the companies said. Wacoal will also have access to Lively's digital strengths, while Lively will "gain access to Wacoal's design and manufacturing resources and distribution channels" and opportunities to expand globally.
While some startups' ultimate goal is an initial public offering, others join the fold of a legacy company in their space.
Such deals, as the companies note in their release, hold promise for both sides. Startups garner an opportunity to scale thanks to established supply chains and deep pockets. And the acquirers obtain expertise, tech prowess, a slice of enthusiastic and sometimes younger consumers and, crucially, data and feedback from highly engaged customers that can inform product iteration and decisions about assortments and volume.
Beyond that, in this case, the two companies' values align, Grant told Retail Dive in an interview Wednesday.
"Their product innovation, their commitment to fit and everything they've done to make the best-fitting bra with the best available technology and resources," she said. "For 30 years [in the U.S.] they've changed lives and they bring [what they call] 'beauty and balance,' which frankly is synonymous with the mission at Lively."
Grant and Lively will remain fairly independent, though the shift for her marks a return to legacy retail. She began her career in merchandising at Federated Department Stores (now, essentially, Macy's), later moving on to V.F. Corp. and eventually Victoria's Secret. "I was there before social media. Now I get to see how things are coming together between the digital and physical worlds — now it's how do you strategically leverage," she said. "We built our brand with a community, they were in it when we were building the brand. That is a big advantage that we have, we can speak with them so naturally. We're a female-founded company — we're in it — and look what we've been able to do."
Since its launch in 2016, Lively has raised $15 million in venture capital funding. Its first investor was NF Ventures, led by intimate apparel manufacturer Gelmart International, which built a factory for the digital native with its supply chain and product innovation, according to the release. The company also boasts 80,000 brand ambassadors.
The acquisition doesn't mean that shoppers will find Lively items alongside Wacoal in department stores, however. Rather, the company will focus on expanding its own physical retail, beyond its stores in New York and Chicago, Grant said, adding that "more will open next quarter." Expanding globally is also a priority, Grant said.