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Levi Strauss Acquiring Beyond Yoga

The Levi Strauss Company, better known for cowboy-worthy blue jeans, is making a play in the activewear market, as it agreed to buy Beyond Yoga for an undisclosed sum.

CNBC reports that, in a deal expected to close by the end of the year, Levi estimates the acquisition will add more than $100 million to its net revenue next fiscal year, and will immediately bolster its earnings.

“We’ve been looking at acquisitions for quite some time, and the activewear space has obviously been very, very attractive,” Levi CEO Chip Bergh said. “We see enormous growth potential here. It puts us as a company smack into the high-growth, high-margin activewear segment.”

The move is all about diversification for Levi, a company that is still primarily known as a maker of jeans and denim products.

The activewear segment was hot before the pandemic, and has grown rapidly since then. That’s partly due to more people working remotely, partly to the rise in the number of people jumping into at-home exercise routines, and partly to a more casual attitude toward work attire.

“As some people start going back to the office, you’re not seeing suits anymore, you’re seeing people go into the office in more casual clothing, even athleisure-type products,” Bergh said. “And it’s a truly global phenomenon.”

Levi Strauss is certainly not alone in their interest in this sector. Just last week, the shoe company Wolverine Worldwide, which also owns Merrell, Saucony, Stride Rite and others, bought out the yoga and exercise clothing company Sweaty Betty for $410 million.

Big box stores like Kohl’s, Target and Dick’s Sporting Good have also launched their own activewear lines, and the segment is booming with new startups.

Beyond Yoga is among the companies showing remarkable growth over a short period. Levi CFO Harmit Singh noted Beyond Yoga has more than doubled its revenue, while growing profitability, in just the past three years.

The brand, headquartered in Los Angeles, was founded by two women in 2005. Its marketing often echoes messages of body positivity and size inclusivity to younger girls. That was another attraction for Levi Strauss, as Bergh said sales to women accounts for only one-third of its business. The company is hoping to boost that figure to 50 per cent through the Beyond Yoga acquisition.

Levi says Beyond Yoga will operate as a standalone division within its business, and co-founder Michelle Wahler will continue to serve as CEO with a high degree of autonomy, reporting to Bergh.

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