The women’s retailer announced it will acquire 75 percent of the brand, with a total enterprise value of $63 million, and acquire the rest of the business over the next five years. Both businesses are headquartered in Vancouver.
Reigning Champ was founded by apparel manufacturer Craig Atkinson and Chris Nordee in 2007 and is known for its high quality, minimalist casual wear and collaborations with Adidas, Asics, the NBA and more. The brand is one of two labels, along with Wings + Horns, that Atkinson co-founded under his firm CYC Design Corp, which owns a cut-and-sew factory in Vancouver and has also manufactured products for the likes of Supreme and Arc’Teryx. Aritzia acquired all of CYC Design Corp, including the factory and the Wings + Horns brand, which was paused in April 2021.
Reigning Champ has stores in Vancouver and Toronto and closed another location in Los Angeles in September. It also sells its collections at boutiques and sportswear stores, like American Rag in California and End Clothing in the UK, as well as select Nordstroms, Bloomingdales and other department stores.
In a statement, Aritzia said Reigning Champ will benefit from Aritzia’s infrastructure and operational expertise. In turn, Aritzia will gain a leg up in the menswear market, which it has only briefly explored with an outerwear line released in 2019.
“Leveraging Aritzia’s unparalleled world-class infrastructure and expertise, this partnership provides an exciting path forward to elevate Reigning Champ to the next level as a premium athletic wear brand,” said Atkinson in a statement.
Atkinson and the brand’s other leaders, co-founder and vice president of manufacturing Chris Nordee and chief financial officer Paul Heathcote, will stay with the brand for about five years to oversee the transition.
Brian Hill, Aritzia’s founder and chief executive, told BoF he had conversations with Atkinson over the last five years about a potential tie-up, and that it escalated over the last three months. Aritzia was motivated by the desire to expand categories, and is currently developing lingerie and swimwear in its women’s business as well.
Hill said he sees a high growth opportunity for Reigning Champ and plans to expand its product assortment and build out its retail and e-commerce distribution. There are no plans at this time to sell the brand through Aritzia’s stores or website, he said. While he thinks Reigning Champ will outgrow the Vancouver factory, Hill said there were no plans to “make any changes there” at this time either.
“This transaction won’t be successful because we come up with a lot of cost-saving initiatives, this transaction will be deemed a success because we’re able to grow the top line of the business,” he said. “It’s a great opportunity for us, but it’s all made possible by this incredible women’s business that we have with Aritzia.”
Aritzia, which went public on the Toronto Stock Exchange in 2016 and operates more than 100 stores in North America, performed better than many of its brick-and-mortar peers during the pandemic. In the year ending February 28, 2021, its net revenue decreased 12.6 percent year-over-year to CAD $857 million (about $706 million), while e-commerce revenue grew by 88 percent, doubling its share to represent 50 percent of total sales. Aritzia is a direct-to-consumer retailer, selling products from nine in-house brands which represent 95 percent of its revenue along with a small wholesale mix.