The maker of Wolverine boots and Keds sneakers is diving deeper into apparel with the acquisition of women’s activewear brand Sweaty Betty for about $410 million in cash, according to the company.
Wolverine Worldwide Inc., WWW 2.79% which is best known for selling shoes since it was founded in 1883, is making the leap into athletic wear as growth surges in the category, along with competition. Brands including J.Crew Group Inc. and Tory Burch LLC now sell their own activewear lines and department stores such as Nordstrom Inc. and Kohl’s Corp. have been devoting more space to the stretchy, performance apparel. Its appeal has only grown during the pandemic, when it has doubled as office attire and loungewear.
“Performance and fashion—there has been a fusion of that over the last several years that’s going to continue into the future,” said Wolverine CEO Blake Krueger. He said Sweaty Betty, which was founded in 1998 and is based in London, has held its own against larger brands. “They’ve carved out their own attributes, their own niche in the market,” he said.
“My mission has always been to empower women through fitness and beyond,” wrote Sweaty Betty’s co-founder, Tamara Hill-Norton, on the company’s website. Ms. Hill-Norton and her husband, Simon Hill-Norton, are no longer formally involved with the company, according to Wolverine.
Wolverine is buying the brand from shareholders that include L Catterton, a private-equity firm co-owned by Bernard Arnault, the CEO of LVMH Moët Hennessy Louis Vuitton SE.
Wolverine executives said they plan to expand Sweaty Betty in the U.S., both online and through new bricks-and-mortar stores. The brand is available in about 60 physical stores in the U.K. Its sculpted yoga leggings, padded bras and midi dresses are also sold at Nordstrom in the U.S. and Canada, and in a few of its own bricks-and-mortar stores in Hong Kong.
Sweaty Betty is on track to have about $250 million in revenue this year. Some 70% of its sales come from e-commerce, which puts it in a strong position as more shopping shifts online.
Sweaty Betty will be Wolverine’s first brand that isn’t focused on footwear. Rockford, Mich.-based Wolverine owns Sperry, Saucony, Chaco and other shoe brands. There are possibilities for collaborations with existing Wolverine brands and Sweaty Betty, Mr. Krueger said.
Wolverine raised its 2021 fiscal year outlook after reporting record second-quarter revenue, citing its largest brands—Merrell and Saucony—which launched new products in hot categories such as hiking and trail running. Revenue for the three months to July 3 was $631.9 million, up 81% from 2020 and 11% from 2019. Wolverine said prior to the Sweaty Betty acquisition that it expected about $2.4 billion in revenue this year.
Sweaty Betty Chief Executive Officer Julia Straus will continue to lead the brand and will report to Wolverine President Brendan Hoffman, who is slated to take over as CEO at the end of the year. Mr. Krueger will become executive chairman.
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