Levi Strauss & Co. (LS&Co.) is acquiring athletic and lifestyle apparel brand Beyond Yoga — a strategic move that will help Levi’s further expand its women’s activewear product line.
With its resources, LS&Co. plans to significantly grow Beyond Yoga’s largely digital business, which accounts for 77 percent of its sales, to its footprint of brick-and-mortar stores and help the brand enter the wholesale category through its various partnerships. The company also plans to offer Beyond Yoga’s products through its direct-to-consumer (DTC) channel.
The acquisition comes at a time when consumers are continuing to show an appetite for athleisure wear. That is a trend that has helped Beyond Yoga grow its business over the years. As a result, the brand has more than doubled its sales within the past three years and is positioned to generate more than $100 million in sales in the fiscal year 2022.
“The brand has more than doubled its revenue and grown profitability in a disciplined manner over the last three years. This acquisition further strengthens LS&Co.’s revenue trajectory, enhances our gross and EBIT margins and is immediately accretive to our earnings. Given our strong liquidity position, this transaction, which is consistent with our capital allocation strategy, allows us to profitably scale a high-return, digital business,” said Harmit Singh, chief financial officer at LS&Co.
Following completion of the transaction, Beyond Yoga will operate as a standalone division within LS&Co. Co-founder Michelle Wahler will continue as chief executive officer of Beyond Yoga and will report to Chip Bergh, president and chief executive officer of LS&Co.
The all-cash deal is expected to close during the fourth quarter of 2021, subject to customary closing conditions.