Wolverine Worldwide has acquired Sweaty Betty in an all-cash transaction valued at approximately $410 million. The deal will help Wolverine shift to a more digitally-focused business model and position the company as a leader in the women’s activewear category. Sweaty Betty CEO Julia Straus will continue to lead the brand, reporting directly to Brendan Hoffman, President of Wolverine Worldwide.
Sweaty Betty makes more than 80% of its revenue through the direct-to-consumer channel, which was a boon during the 2020 lockdowns. The retailer reported “triple-digit digital growth” for the year alongside 60% overall revenue growth as customers stocked up on apparel for their at-home exercise routines, according to The Evening Standard.
“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. It also gives us a leadership position in the growing women’s activewear category,” said Blake W. Krueger, Chairman and CEO of Wolverine in a statement. “Wolverine Worldwide has a long and successful track record of acquiring and building brands, including performance brands like Sweaty Betty, and we are thrilled to welcome them to our company.”
In addition to its ecommerce presence, Sweaty Betty has 46 stores in the UK and several in Hong Kong. Its products are sold at more than 50 Nordstrom stores in the U.S., with plans to reach more than 95 locations by the end of 2021.
The women’s activewear category has been strong in the first half of 2021; lululemon reported 88% revenue growth in Q1 2021, which ended May 1. The retailer’s 101% brick-and-mortar growth during this period could be attributed to the recovery from COVID, but lululemon’s direct-to-consumer sales also rose, by 55% to $545.1 million, demonstrating that there is still plenty of room for growth in the category.
Additionally, Athleta has been a bright spot for the otherwise struggling Gap Inc. The brand posted a 56% net sales gain versus 2019 in Q1 2021, which ended May 1. Comparable sales grew 27% year-over-year and 46% versus 2019, with digital growth soaring 113% compared to Q1 2019.