Can Sweaty Betty and Beyond Yoga take on Lululemon?
Sweaty Betty has 65 stores in its home base of the U.K. and Hong Kong and is expected to generate about $250 million in revenue this year. The women’s activewear brand expanded into the U.S. in 2013, but closed all 12 stores during the pandemic. Its products are still sold online and inside Nordstrom locations in the U.S. Online sales make up about 70 percent of sales.
The $410-million purchase is expected to help Wolverine, a major footwear supplier with brands including Merrell, Saucony and Sperry, accelerate its direct-to-consumer push, particularly online, expand internationally and diversify beyond footwear.
Wolverine told analysts on a call that the global activewear market is growing mid-to-high single-digits with the premium women’s portion approaching double-digit growth.
“The market segment is benefiting from several established macro trends, including consumer focus on health & wellness and casualization,” said Brendan Hoffman, Wolverine’s president on the call. “There is also an ongoing trend towards more premium products, incorporating higher-quality materials, cutting-edge innovation and design, and sustainability. The confluence of all these powerful trends is contributing to Sweaty Betty’s accelerated growth.”
Levi’s likewise sees Beyond Yoga capitalizing on “the continued consumer uptake of premiumization, casualization and wellness trends.” The Los Angeles-based, digital-native brand is expected to contribute more than $100 million to Levi’s net revenue in FY22 and help Levi’s increase sales to women and build up its digital business. Levi’s is expected to expand Beyond Yoga’s wholesale distribution.
Sweaty Betty and Beyond Yoga face a host of competitors, from Lululemon, Gap-owned Athleta, Nike and to other similar niche up-starts.
On Wolverine’s investor call, Blake Krueger, CEO, said Sweaty Betty differentiates itself from market leader, Lululemon, by addressing ski, swim and biking activities rather than focusing largely on yoga and running. It also emphasizes color and lifestyle offerings. “We think it nails the way trends are moving with everyone going back to work but still wanting to stay very comfortable,” Mr. Krueger said.
- Wolverine Worldwide Acquires Women’s Activewear Brand Sweaty Betty – Wolverine Worldwide
- Wolverine Worldwide call to discuss the acquisition of Women’s Activewear Brand Sweaty Betty – Wolverine Worldwide
- Levi Strauss & Co. To Acquire Activewear Brand Beyond Yoga – Levi Strauss
- Wolverine Buys Sweaty Betty for $410 Million – The Wall Street Journal
- Wolverine World Wide Acquires Sweaty Betty – WWD
- Levi Strauss & Co. to Buy Beyond Yoga – Business Of Fashion
DISCUSSION QUESTIONS: Do the acquisitions of Sweaty Betty by Wolverine Worldwide and Beyond Yoga by Levi Strauss make strategic sense? Will both brands need to fine-tune their positioning in an increasingly crowded activewear space?