Designer Brands, the parent of DSW, paid $123.3 million to acquire the Keds business from Wolverine World Wide and paid $19.1 million to acquire majority ownership of Topo Athletic, according to the company’s recently-released annual report.
When Designer Brands announced the acquisitions, it did not disclose the purchase price of the deals.
The acquisition of Keds, which included the Keds brand, inventory and inventory-related accounts payable, closed on February 4.
Wolverine acquired Keds as part of its 2012 acquisition of Performance + Lifestyle Group (PLG) for $1.23 billion. The PLG business also consisted of Sperry Top-Sider, Saucony and Stride Rite.
Designer Brands acquired a 79.4 percent ownership interest in Topo Athletic on December 13.
The acquisitions follow Designer Brands to acquire a 33 percent stake in Le Tigre for $8.2 million last July, when it simultaneously entered into an exclusive licensing agreement for Le Tigre footwear in July focused on athletic footwear.
The acquisition further diversified Designer Brands’ broader portfolio of Owned Brands, which includes Vince Camuto, Jessica Simpson, Crown Vintage, Mix No. 6, Lucky Brand and Kelly & Katie.
On Designer Brands’ fourth-quarter conference call, Doug Howe, president of DSW and incoming CEO, said he was confident that the company’s recent Keds, Le Tigre and Topo Athletic acquisitions would help the company be a force in the athletic category.
“In recent months, we have made three exciting acquisitions, Le Tigre, Topo Athletic and Keds,” said Howe, who replaces Roger Rawlins as CEO on April 1. He said the acquisitions support Designer Brand’s goal of becoming “a leading brand builder” and “get us even closer” to its goal of having its owned brands represent one-third of total sales by 2026.
“This is notable for two reasons,” said Howe, who began leading DSW last year and was previously head merchant at Kohl’s. “First, it demonstrates our ability to make material progress on our strategy. Twelve months ago, we had no athletic or athleisure product represented in our own portfolio, and now we own brands across all major price points for our customers to shop. And secondly, it highlights the importance of our national brand partners to our own brand strategy.”
Rawlins discussed Designer Brands’ transition into a “multinational, brand-building enterprise” that began in 2016 as the company felt a significant shift was necessary with many footwear brands starting to sell direct-to-consumer.
Designer Brands has grown its athleisure penetration from roughly 30 percent to over 47 percent of its assortment. Said Rawlins, “We’ve gained market share in the category through the expanded assortment of top national brands at DSW and the amazing Canadian results, our launch of Keds footwear, and the recent acquisitions of Keds, Le Tigre and Topo, which now sit on our owned brands portfolio.”
Photo courtesy Topo Athletic
