As part of a strategic way to enhance the company's DTC strategy, footwear retailer Wolverine World Wide announced on Tuesday that it acquired fitness brand Sweaty Betty, according to a company press release.
Wolverine acquired all the shares of Lady of Leisure InvestCo Limited, the parent company to Sweaty Betty, from private equity company L Catterton and other shareholders for around $410 million. The deal, which was funded by cash and Wolverine's revolving line of credit, closed on Aug. 2.
Sweaty Betty's CEO, Julia Straus, will continue to lead the brand and will report to Wolverine World Wide President Brendan Hoffman.
Wolverine World Wide is best known for its portfolio of successful footwear brands including Sperry, Hush Puppies, Keds and Stride Rite. Now the conglomerate is bringing on an activewear brand in an effort to further define itself as a lifestyle company.
Sweaty Betty, which was founded in 1998 in London, sells a variety of women's activewear products including tops, bottoms, swimwear, outerwear and accessories. (The company says that every 60 seconds it sells a pair of its Power Leggings.) Over 80% of the brand's revenue currently comes through direct-to-consumer sales, which plays into Wolverine's objectives of expanding its DTC strategy.
Wolverine CEO Blake Krueger spoke of those efforts in an earnings call with analysts on Thursday, saying that Wolverine has developed a strong DTC-focused distribution model. The company's DTC stores are up almost 20% compared to 2019, while the DTC e-commerce business more than doubled in that same period.
"The acquisition of Sweaty Betty complements our strategic shift over the last several years from a traditional footwear wholesaler into a consumer-obsessed, digital-focused growth company," Krueger said in a statement. "It also gives us a leadership position in the growing women's activewear category."
That category is currently one of intense competition, especially as people have reached for comfortable clothing and increasingly engaged with at-home workouts during a pandemic. Lululemon in June announced that its first quarter revenues increased 88% to $1.2 billion, and Wedbush analyst Jen Redding said athleisure shows "no signs of slowing." Target's private label activewear brand All in Motion delivered $1 billion in its first year.
"Sweaty Betty aligns perfectly with our strategic growth plan for Wolverine World Wide, as we focus on growing digital channels, expanding our international footprint, and building our brand portfolio beyond footwear," Hoffman said in a statement.
The conglomerate is planning the launch of an active and athleisure Sperry Sport collection, which will debut in the spring of 2022. It also is considering further mergers and acquisitions. "We, frankly, remain pretty active in kicking the tires and taking a look at properties," Kruger said on the earnings call, further explaining that it is not just looking at footwear brands, but other businesses like apparel, vertically integrated brands and digital brands.