With its slimmer cuts and focus on the minutiae of stitching and sleeve lengths, Reigning Champ has built a rep for elevated athletic wear.Fahim Kassam
Popular women’s apparel retailer Aritzia Inc. is looking to break into the men’s market, purchasing a majority stake in athletic-wear designer and manufacturer Reigning Champ.
The Vancouver-based retailer announced the deal on Monday. Aritzia will acquire 75 per cent of the company for cash in a deal that values Reigning Champ at $63-million in total, according to Aritzia. The remaining 25 per cent stake, held by Reigning Champ’s management, will be converted to Aritzia shares in three instalments that will take place between 2024 and 2026.
Reigning Champ, which is also based in Vancouver, sells streetwear and athletic wear for both men and women – including sweats, T-shirts and accessories. It sells direct to consumers online and in four of its own retail stores in Vancouver and Toronto. It also has a wholesale business selling to retailers in Canada and globally, including Nordstrom, Saks Fifth Avenue, Simons and Harry Rosen.
Reigning Champ is expected to generate roughly $25-million in revenue this year, according to Aritzia.
Roots sees ‘adjustment period’ as shoppers remain wary during postpandemic reopening
Fashion brand Forever 21 returns to Canada with collections in Hudson’s Bay stores
Aritzia first dipped a toe into men’s apparel sales in 2019, when it offered its Super Puff winter jacket for both men and women – and quickly sold out of sizes in both. But the company has no plans to begin selling a greater assortment of men’s clothing in Aritzia stores.
“Reigning Champ’s position in the men’s landscape is different from Aritzia’s position in the women’s landscape,” Aritzia chief executive Brian Hill said in an interview on Monday. “Reigning Champ is a little higher-priced, it’s a little more scarce. We’re going to make sure that that positioning is held in the marketplace.”
While purchases of sweatpants and leisure wear have been booming during the pandemic, Mr. Hill said that he expects men to continue to be drawn to casual athletic wear as everyday clothing. Mr. Hill sees an opportunity, particularly in stylish casual clothing at a higher price point – Reigning Champ’s sweatshirts sell for $140 to $190 – which is “alive and well,” he added.
Reigning Champ’s current management team – co-founder and CEO Craig Atkinson, co-founder and vice-president of manufacturing Chris Nordee, and chief financial officer Paul Heathcote – will remain with the company for approximately five years.
Mr. Hill said there are plans to open more Reigning Champ stores in markets such as New York, as well as to expand both the e-commerce and wholesale business. Aritzia’s IT, distribution systems and other infrastructure can be applied to the men’s business as well, Mr. Hill added.
“We’re in product categories that they are not in. They don’t really have an outerwear program; we have a world-class outerwear program,” Mr. Hill said. “They’re excited to be able to tap into our supply chain – and we’re excited about the brand and their market position.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.