Even Levi’s is buying yoga pants now.
The denim maker is acquiring Beyond Yoga, a US-based seller of yoga clothing and casual sportswear. In its announcement of the deal, Levi’s said the purchase allows it to diversify its business and break into the thriving activewear market. Levi’s didn’t reveal the price it paid for Beyond Yoga, but said it would provide further details once the transaction closes, which it expects to happen in the fourth quarter of the year.
Founded in 2005 and based in Los Angeles, Beyond Yoga is growing fast. The company’s sales have more than doubled over the past three years while it has also grown its profitability, Harmit Singh, CFO of Levi’s, said in a statement included in the announcement. Levi’s believes it can help with that expansion, and anticipates the acquisition will add more than $100 million to its total sales in fiscal year 2022.
The purchase also fits with some of Levi’s strategic priorities, notably increasing its sales to women and building up its digital business. Historically, the cornerstone of Levi’s business has been its sales of men’s jeans, but the company has been trying to balance that with more products aimed at young female customers. It has also long relied on retail partners such as department stores to reach shoppers, but has been investing in its sales directly to shoppers, especially online. Beyond Yoga, nearly 90% of whose employees are women, sells activewear for women in a range of sizes, from XXS to 4X, as well as offering items such as dresses and jumpsuits. And digital sales make up 77% of its business.
Importantly, the company also gives Levi’s an entry point to activewear, a market that has taken off in recent years, creating challenges for Levi’s itself at moments.
Yoga pants and other comfortable athletic clothing have become a popular option for everyday wear as interest in health and fitness grows, dress becomes more casual, and shoppers prioritize comfort and versatility in their clothes. It’s led to a flood of stretchy bottoms hitting the US market, putting pressure on Levi’s and other denim companies in recent years. Levi’s adjusted, adding more stretch to its jeans to keep shoppers interested, and its current sales are strong as shoppers trade in their skinny jeans for wider-legged styles.
But the growth of athletic clothes isn’t slowing. In the first half of 2021, sales of activewear in the US were up more than 40% compared to the same time last year, and were more than 25% higher than their 2019 levels, according to recent data from NPD Group, a market research firm.
Unsurprisingly, it isn’t just Levi’s jumping on the activewear bandwagon. Wolverine Worldwide, the large footwear group that owns brands including Keds and Sperry, acquired Sweaty Betty, a women’s fitness company, for approximately $410 million earlier this month.
Globally, sales of sportswear are expected to continue increasing (paywall). In its announcement of the deal, Levi’s noted Beyond Yoga has the opportunity to expand internationally, too.