US footwear firm buys Sweaty Betty in $400m deal
Sweaty Betty, the upmarket British workout gear brand, has been sold to a US footwear firm in a $410m (£295m) deal that will all but sever ties between the company and the husband-and-wife team who founded it.
After a year-long sale process that had been expected to fetch as much as £400m, the Michigan-based footwear manufacturer Wolverine Worldwide said it had struck a deal at a lower price with Sweaty Betty’s backers.
Named after the comic book character Betty Cooper, a musician in a garage band from the 1960s American series Archie Comics, the company was founded by Tamara Hill-Norton, who opened the first store Notting Hill in 1998. The brand combined fashionable designs with the latest in sportswear technology, counting the “bum sculpting” legging among its bestsellers.
The private equity group L Catterton was Sweaty Betty’s largest shareholder with more than 60% of the business, after it injected funds in 2015. The other major shareholder was Wittington Investments, a vehicle owned by the transatlantic Weston family, who also own Heal’s, Fortnum & Mason’s and the majority of Associated British Foods, a group that includes the fashion chain Primark.
Wolverine bought 100% of the company at a $410m enterprise value, which includes debt. In a conference call, Wolverine’s president, Brendan Hoffman, said Sweaty Betty’s rapid growth was particularly attractive, as well as its popularity with customers who “skew more affluent”.
Sweaty Betty reported revenues of nearly £73m in the year to the end of 2019 but Wolverine said sales in 2021, which have not previously been reported, were closer to £180m.
Hoffman said Sweaty Betty was “taking market share, growing much faster than its core market” and highlighted the opportunity to replicate the brand’s UK success in the US. More than three-quarters of Sweaty Betty’s revenue comes from the UK, where it has 65 stores.
Wolverine said Sweaty Betty had previously started to set up shop in the US but had used the pandemic to get out of onerous leases for bricks-and-mortar premises there, standing it in good stead to start again and grab market share more cheaply.
Wolverine also emphasised the US potential in a presentation to investors, pointing out that the American “activewear” market is around $40bn compared with less than $5bn in the UK.
Julia Straus will continue to lead Sweaty Betty as chief executive but the deal means Hill-Norton and her husband, Simon, who co-founded the business, will further loosen their ties.
Tamara Hill-Norton was the company’s creative director until recently. The company said that she would now “continue to support the brand”, as well as remaining chair of the trustees of the Sweaty Betty Foundation.
She and her husband, a former chief executive who became chair in 2019, both ceased to be directors as of 2 August, according to Companies House filings.
A spokesperson did not say how much the Hill-Nortons had made in the sale but the same filings show they had less than 0.6% of the company between them as of November 2015.