Wolverine World Wide is furthering its goal to expand its digital presence with the acquisition of fitness lifestyle brand Sweaty Betty. The all-cash deal, valued at about $410 million, closed on Monday.
The move represents Wolverine’s commitment to e-commerce, a goal of Brendan Hoffman, who is set to assume the role of CEO at Wolverine World Wide Inc. at the end of the year. It also gives Wolverine a stake in the fast-growing and competitive women’s activewear category, which is led by high-growth brands like Lululemon.
The digitally-native Sweaty Betty operates more than 60 stores globally and is sold in retailers across North America. More than 80% of the brand’s revenue comes from direct-to-consumer channels and 70% comes from e-commerce.
“Sweaty Betty, a brand that we’ve been following for several years, kind of perfectly dovetailed and fit all of our strategic acquisition criteria,” said Blake Krueger, Wolverine’s chairman and CEO. “They brought some competencies to the company, they’re in apparel, they’re vertically integrated, they’re focused on digital.”
Sweaty Betty, which sells a variety of women’s activewear, swimwear, accessories, and outerwear, joins a roster of Wolverine’s diverse brands that included Merrell, Saucony, Sperry, Hush Puppies, and Keds. Wolverine operates its brands across about 170 countries and territories.
Krueger said he sees opportunity for synergies between Sweaty Betty and some other Wolverine Brands, such as Saucony and Merrell.
“Sweaty Betty today doesn’t do any footwear,” Krueger said. “We know we can help them in that category. We were in the process of a collaboration with the Merrell brand even before we started taking a hard look at the brand and the business.”
On Thursday, Wolverine reported that company-owned e-commerce revenue more than doubled in the first half of 2021 compared to 2019 in its Q2 earnings on Thursday. Wolverine beat estimates the second quarter and raised its outlook for 2021.
Sweaty Betty CEO Julia Straus will remain at the helm of the brand, reporting to Hoffman.
“Sweaty Betty has seen incredible growth over the past few years, and we are excited to further accelerate this growth as part of the Wolverine Worldwide family,” said Straus. “Their portfolio of purpose-driven heritage brands, knowledge and expertise in building performance brands, robust international distribution, and supply chain expertise provides a strong platform to expand Sweaty Betty and further our mission to ‘empower more women through fitness all over the world’.”
Wolverine was initially listed as one of the potentially interested buyers looking to purchase Reebok from Adidas, though Krueger declined to comment on any rumors.
“We’ve been very active over the last 20 or so years at kicking the tires, looking at being very selective, looking at brands and opportunities on a global basis,” he said. “Sweaty Betty is a significant opportunity for us in the near term. We’re obviously going to be focused on doing whatever we can to help them grow and maximize the opportunity for their business, which is significant right now.”