The owner of Wolverine boots, Hush Puppies and Keds is expanding into women’s activewear with an all-cash deal for Sweaty Betty, a fitness retailer known for its bum-sculpting leggings.
Michigan-based Wolverine Worldwide is acquiring Sweaty Betty from investors including LVMH-backed private equity firm L Catterton.
It’s the latest in a series of deals in the fashion sector and targets an area that has been relatively resilient to the pandemic and is expected to continue growing, as trends towards a more casual wardrobe, wellness and fitness cement themselves in consumer culture.
“We’re not seeing a slowdown at all,” Sweaty Betty chief executive Julia Straus said. “As we come out of [the pandemic], these are habits and lifestyles that you’re seeing continue with our customer.”
Sweaty Betty was founded in London 1998 as these trends were just beginning to emerge. L Catterton invested in 2015 with a goal to accelerate global growth. Revenue jumped 60 percent in 2020 to nearly $175 million and is expected to rise to $250 million this year, according to Wolverine Worldwide.
The footwear-focused group said it sees an opportunity to boost Sweaty Betty’s position in the US and other markets through its retail contacts and expand it into footwear. Separate to the acquisition, Sweaty Betty had already begun a collaboration with Wolverine Worldwide-owned Merrell, which is known for its hiking and trail shoes.
Wolverine Worldwide said Sweaty Betty, which generates more than 80 percent of its revenue through direct-to-consumer (DTC) sales, will also help bolster its digital and apparel offering as it shifts away from a predominantly wholesale model in response to the pandemic. The group previously announced a goal to hit $500 million in direct online sales this year, more than double 2019 levels.
“I think it’s critically important as we expand our DTC offering to have multiple categories,” said sdan Hoffman, Wolverine Worldwide’s president. “We can’t just be a footwear store; we have to have adjacent categories to really offer the customer a robust experience.”
Wolverine Worldwide said it expects Sweaty Betty to boost the group’s overall earnings within the first year.
Hoffman, who joined the helm of Wolverine Worldwide earlier this year, said the company is still in the market for deals. “I think we’ll continue to be opportunistic,” he said.
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