Aritzia’s latest foray into men’s wear—with a $63 million purchase of Reigning Champ—comes after the brand’s most difficult year and marks the next chapter for the influencer-favorite Canadian apparel brand.
“The past year has been the most challenging in Aritzia’s history. With that said, we’ve had some exceptional results, including seeing a strong start to fiscal 2022,” Aritzia founder, CEO and chairman Brian Hill said over email.
“In particular, our e-commerce platform’s been hitting new highs on a weekly basis and our U.S. business has been growing at a rate we’ve never experienced before—and our brand is becoming more well known. We wanted to capitalize on that momentum, and this kind of success for Aritzia makes acquisitions like Reigning Champ a possibility.”
The deal is Aritzia’s first acquisition in more than 37 years.
“We’re excited to welcome Reigning Champ. Rooted in classic, timeless athletic wear, their brand has been carefully curated for just short of fifteen years,” added Hill, in a prepared release.
“Building on Aritzia’s strong start to fiscal 2022, this acquisition meaningfully accelerates our product expansion into men’s.”
Aritzia, whose trendy styles have captured the attention of celebrities like Meghan Markle and Kendall Jenner, reported e-commerce revenue growth of 81% compared to fourth quarter last year during its earnings report last month.
Net revenue for the Vancouver-based brand dipped 2.9% to $267.5 million from fourth quarter last year, yet sales productivity of reopened boutiques performed on average at 79.6% of last year’s levels despite pandemic-related restrictions.
Aritzia has more than 100 boutiques in North America, with 30 boutiques in the U.S. and has identified 100 possible future store locations in the U.S. Details are still being finalized, and there are plans to open stores in Florida, Arizona, Tennessee, Nevada and Virginia.
One analyst said the apparel brand’s acquisition fills a whitespace category nicely.
“Since the brands do not play in overlapping spaces, this acquisition is not about strengthening the Aritzia brand but rather about accelerating the growth of Reigning Champ,” said Chad Lusk, senior director of Alvarez & Marsal Consumer and Retail Group, a global consultancy specializing in business transformation.
“By leveraging its infrastructure and supply chain expertise, Aritzia should be able to expand Reigning Champ’s reach, consumer exposure and, ultimately, its margins.”
Another analyst commended Aritzia’s diversification strategy.
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Read More: After Challenging Year, Aritzia Forges Into Menswear With Reigning Champ