Levi’s CEO on Activewear Acquisition: ‘Beyond Yoga Will Become a Powerful Growth Engine
Levi Strauss & Co. may be world-renowned for its denim, but even the legendary 501 maker wants a piece of the activewear action, acquiring size-inclusive Beyond Yoga in an all-cash transaction for an undisclosed sum.
For LS&Co., the activewear entry complements its growing women’s category, which represents approximately one-third of its total business. The denim giant wants to raise this figure to half of total sales.
With Levi Strauss’ resources and infrastructure, Beyond Yoga can now tap into the brand-building expertise of an iconic label. The premium brand plans to expand its direct-to-consumer business, with growth ambitions focused on brick-and-mortar retail, gender and categories. The athleisure brand is also looking to further develop its wholesale footprint with more premium partners. Beyond Yoga already sells products in high-end retailers including Nordstrom, Bloomingdale’s and Neiman Marcus.
“This acquisition establishes LS&Co.’s presence in the fast-growing activewear segment with a brand with tremendous growth potential,” Chip Bergh, president and chief executive officer of LS&Co., said in a statement. “The foundation the Beyond Yoga team has built, combined with LS&Co.’s resources, global reach and scale, make me confident that Beyond Yoga will become a powerful growth engine for LS&Co. and help drive our strategic priorities.
The denim CEO added that “Beyond Yoga’s values-led approach to business, centered on inclusivity and authenticity, makes it a natural fit to our company portfolio.”
Los Angeles-based Beyond Yoga was founded in 2005, manufacturing and selling athleisure apparel in sizes from XXS to 4X. The female-founded, female-run and 85 percent female led brand says its clothing is designed to foster wellbeing in “luxuriously soft, no-hassle care fabrics.” Beyond Yoga has fostered an inclusive community centered on body positivity, celebrating diversity, and giving back to charitable causes.
“I have always had one goal: to make women feel good in their bodies. Beyond Yoga was created with this mission in mind, and it has served as the touchstone of the company,” said Jodi Guber Brufsky, co-founder and chief creative officer of Beyond Yoga. “It was important to me that when the time came, the company would move into the hands of someone whose values matched ours. We are so excited about this partnership and look forward to a successful future.”
Following completion of the transaction, which is expected to close during the fourth quarter, Beyond Yoga will operate as a standalone division within LS&Co.
Co-founder Michelle Wahler will continue in her role as CEO of Beyond Yoga, reporting directly to Bergh.
“We are honored and excited to become a part of the LS&Co. family,” Wahler said in a statement. “Joining their portfolio will enable us to accelerate our growth by leveraging the experience and resources of their team and their global infrastructure. We are thrilled to have LS&Co. help us expand our brand to a wider audience, as we continue to promote our mission of inclusivity and acceptance for all.”
Harmit Singh, chief financial officer of LS&Co., said that Beyond Yoga more than doubled its revenue and grew profitability “in a disciplined manner” over the past three years. What’s more, Singh believes the transaction would allow the Levi’s parent to “profitably scale a high-return, digital business.”
Beyond Yoga is expected to be immediately accretive to LS&Co’s gross margins, EBIT margins and earnings per share, while also contributing more than $100 million to net revenue in the 2022 fiscal year.