VANCOUVER, BC, June 14, 2021 /PRNewswire/ - Aritzia (TSX: ATZ)
("Aritzia"), a vertically integrated, innovative design house
offering Everyday Luxury online and in its boutiques, is
accelerating its product expansion strategy for men's through a
definitive agreement to acquire Reigning Champ, a leading designer
and manufacturer of premium athletic wear. Aritzia will acquire 75%
of Reigning Champ based on a total enterprise value of
approximately $63 million, with the
remaining 25% equity interest purchased through 2026.
"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," said Brian
Hill, Founder, Chief Executive Officer and Chairman of
Aritzia. "Building on Aritzia's strong start to fiscal 2022, this
acquisition meaningfully accelerates our product expansion into
men's while bringing incremental growth to our already surging
women's eCommerce and U.S. businesses. Capitalizing on our
world-class operational expertise and infrastructure, men's,
merchandised independently, will become a meaningful part of
Aritzia's platform through our Reigning Champ
acquisition."
Inspired by the culture of sport, Reigning Champ is a leading
designer and manufacturer of premium athletic wear, utilizing
unparalleled materials and craftsmanship. Rooted in classic,
timeless garments, Reigning Champ is sold in the most influential
digital and retail locations throughout the world, and as a result
of the acquisition, will see an immediate benefit in tapping into
Aritzia's best-in-class infrastructure and operational
expertise.
"As an innovative design house offering exceptional experiences
through its online and retail platforms, Aritzia's well-established
track record as a successful direct-to-consumer business is one
that we've long admired. Leveraging Aritzia's unparalleled
world-class infrastructure and expertise, this partnership provides
an exciting path forward to elevate Reigning Champ to the next
level as a premium athletic wear brand. We look forward to working
with the incredibly talented Aritzia team to capitalize on the
limitless opportunities ahead," said Craig
Atkinson, Co-Founder and Chief Executive Officer of Reigning
Champ.
Atkinson is joined on Reigning Champ's senior leadership team by
Co-Founder and Vice President of Manufacturing Chris Nordee and Chief Financial Officer
Paul Heathcote – all with a long
history in the apparel industry. They will continue operating the
business in partnership with Aritzia through a transition period of
approximately five years to allow both businesses to focus on
sustaining their unique brands and cultures while leveraging
mutually beneficial synergies and efficiencies to an accelerated
path forward.
Aritzia will acquire 75% of Reigning Champ based on a total
enterprise value of approximately $63
million. The remaining 25% equity interest held by Reigning
Champ's management shareholders will be converted into Aritzia
shares in up to three instalments from 2024 to 2026. Reigning Champ
is expected to deliver approximately $25
million in revenue and $5
million in adjusted EBITDA in calendar 2021. The acquisition
is expected to be completed in June
2021, subject to customary closing conditions and approvals.
Aritzia will fund the initial purchase with cash on hand.
Financo | Raymond James served as
financial advisors to Aritzia, with Borden Ladner Gervais LLP
acting as legal counsel. RBC Mid-Market Mergers & Acquisitions
served as financial advisors to Reigning Champ, with Blake, Cassels
& Graydon LLP acting as legal counsel.
About Reigning Champ
Inspired by the culture of sport, Reigning Champ is a leading
designer and manufacturer of premium athletic wear, utilizing
unparalleled materials and craftsmanship.
Founded in 2007, headquartered in Vancouver, Canada and sold in the most
influential digital and retail locations throughout the world,
Reigning Champ is rooted in classic, timeless garments.
Our process is guided by our principles: Respect the details.
Master simplicity.
About Aritzia
Aritzia is a vertically integrated design house with an
innovative global platform. We are creators and purveyors of
Everyday Luxury, home to an extensive portfolio of exclusive brands
for every function and individual aesthetic. We're about good
design, quality materials and timeless style — all with the
wellbeing of our people and planet in mind.
Founded in 1984, in Vancouver,
Canada, we pride ourselves on creating immersive, and highly
personal shopping experiences at aritzia.com and in our 100+
boutiques throughout North America
to everyone, everywhere.
Everyday Luxury. To elevate your world.TM
Forward-Looking Information
Certain statements made in this press release may constitute
forward-looking information under applicable securities laws.
Particularly, information regarding the terms and timing of our
acquisition of Reigning Champ as well as our expectations of future
results, targets, performance achievements, prospects or
opportunities are forward-looking information. As the context
requires, this may include certain targets as disclosed in the
prospectus for our initial public offering, which are based on the
factors and assumptions, and subject to the risks, as set out
therein and herein. Often but not always, forward-looking
statements can be identified by the use of forward-looking
terminology such as "may", "will", "expect", "believe", "estimate",
"plan", "could", "should", "would", "outlook", "forecast",
"anticipate", "foresee", "continue" or the negative of these terms
or variations of them or similar terminology.
Given this unprecedented period of uncertainty, there can be no
assurances regarding: (a) the certainty and timing of our
acquisition of Reigning Champ; (b) the limitations or restrictions
that may be placed on servicing our clients in reopened boutiques
or potential re-closing of boutiques; (c) the COVID-19-related
impacts on Aritzia's business, operations, supply chain performance
and growth strategies, (d) Aritzia's ability to mitigate such
impacts, including ongoing measures to enhance short-term
liquidity, contain costs and safeguard the business; (e) general
economic conditions related to COVID-19 and impacts to consumer
discretionary spending and shopping habits; (f) credit, market,
currency, interest rates, operational, and liquidity risks
generally; and (g) other risks inherent to Aritzia's business
and/or factors beyond its control which could have a material
adverse effect on the Company.
Many factors could cause our actual results, level of activity,
performance or achievements or future events or developments to
differ materially from those expressed or implied by the
forward-looking statements, including, without limitation, the
factors discussed in the "Risk Factors" section of the Company's
annual information form dated May 11,
2021 for the fiscal year ended February 28, 2021 (the "AIF"). A copy of the AIF
and the Company's other publicly filed documents can be accessed
under the Company's profile on SEDAR at www.sedar.com.
The Company cautions that the list of risk factors and
uncertainties described in the AIF is not exhaustive and other
factors could also adversely affect its results. Readers are urged
to consider the risks, uncertainties and assumptions carefully in
evaluating the forward-looking information and are cautioned not to
place undue reliance on such information. The forward-looking
information contained in this press release represents our
expectations as of the date of this press release (or as the date
they are otherwise stated to be made), and are subject to change
after such date. However, we disclaim any intention or obligation
or undertaking to update or revise any forward-looking information
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws.
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SOURCE Aritzia Inc.
