The company behind Merrell, Saucony, Sperry, Stride Rite and other shoe names is adding premium women's activewear brand Sweaty Betty to its portfolio as it expands its categories, geographies and online sales.
Wolverine Worldwide bought the 23-year-old digitally native Lululemon competitor for $410 million from L Catterton. a consumer-focused private equity firm. The deal, which closed Monday, was funded by cash and a revolving line of credit.
"Sweaty Betty aligns perfectly with our strategic growth plan for Wolverine Worldwide, as we focus on growing digital channels, expanding our international footprint, and building our brand portfolio beyond footwear," Wolverine President and incoming CEO Brendan Hoffman said in a statement Tuesday.
Sweaty Betty CEO Julia Straus will stay on and report to Hoffman. Straus said Wolverine's "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.'"
The footwear portfolio company expects Sweaty Betty to immediately add to its earnings and raised its full year revenue forecast to a range of $2.44 billion to $2.5 billion, up from its previous expectations of $2.34 billion to $2.4 billion.
Wolverine World Wide shares rose 1.4% on the news. The stock is up more than 7% since the start of the year, bringing its market value to $2.79 billion.
Sweaty Betty was founded in the United Kingdom as a digital-first brand. It now has 65 stores in the U.K. and Hong Kong and expects about $250 million in revenue this year. Online sales make up about 70% of revenue, with 80% being sold direct to consumer.
While the brand expanded into the U.S. in 2013, it closed all 12 of its U.S. stores during the pandemic. Its products are still sold through a partnership with Nordstrom that was launched in 2018.
The deal will allow Wolverine to tap Sweaty Betty's expertise in apparel and the growing market for women's premium activewear. Sweaty Betty is expected to benefit from Wolverine's footwear expertise and its experience in the U.S., which remains one of its key avenues for growth, despite the recent store closures.
Late last week, Wolverine Worldwide announced record revenue for its fiscal second quarter. Total direct-to-consumer revenue rose more than 17% from the year-ago period and increased 69% from 2019.
Chief Financial Officer Mike Stornant said Wolverine's future orders remain at historically high levels with strong sell-through at its retail partners.