VF Corp. is entering the wearables fitness market.
The apparel and footwear giant has signed an agreement to acquire the Altra footwear brand from Icon Health & Fitness Inc.
Terms of the agreement were not disclosed. VF said the transaction is expected to be completed next month and that the “addition of the Altra brand to VF’s portfolio is expected to be immediately accretive to earnings per share.” The Altra brand, on a trailing 12-month basis, generates about $50 million in revenue.
The Altra brand is also known as Altra Running, and is one of the top brands in the “run specialty” category, particularly for trail running. The Logan, Utah-based company was started in 2009 and is known for a unique construction where the heel and forefoot have the same distance from the ground, or what the brand refers to as its “zero drop platform.” Golden Harper, the brand’s founder, also developed a distinctive toe box to keep toes straight and alleviate foot problems. The brand’s first shoe was introduced in North America in 2011 and it won the Runner’s World Magazine’s 2012 Editor’s Choice Best Debut award.
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More recently, Altra about two years ago introduced its first smart shoe, Altra IQ, which uses technology to help runners analyze their biomechanics — stride, foot strike zone and pace — as they run. The technology is powered by Icon’s iFit, its connected fitness subscription, with the data being transmitted to a mobile device for analysis. A second running shoe, the Altra IQ, combines both tracking and voice coaching and was launched last year. This shoe has an embedded sensor in the insole, powered by button cell batteries, and when tethered to a smartphone, can provide real-time information on how to run better.
The Altra brand in 2016 also added running and hiking apparel categories to its lineup.
Steve Rendle, VF’s chairman, president and chief executive officer, said, “The active outdoor and performance sector is a large and attractive growth space. The addition of the Altra brand brings to VF a unique and differentiated technical footwear brand and a capability that when applied across VF’s outdoor footwear, direct-to-consumer and international platforms will serve as a catalyst for growth.”
How VF could use the Altra IQ technology, or whether it would still rely on Icon’s iFit fitness subscription model, remains unclear. VF declined to comment further about the transaction since it hasn’t yet closed. Information about the technology on the altrarunning.com site noted that razor-thin sensors are embedded in each of the shoe’s midsoles for the IQ line, which is available for both men and women.
Scott Watterson, Icon’s chairman and ceo, said, “The Altra brand’s truly innovative product and devoted brand loyalists will serve it well in its new home at VF.” He added that the sale would enable Icon to focus on accelerating the growth of its NordicTrack and ProForm core brands, as well as iFit, Icon’s connected fitness subscription.
VF executives said during its March 2017 Investors Day meeting that mergers and acquisitions would remain a key focus of the company as its works on its five-year strategic growth plan. Rendle has told WWD in past interviews that the company is looking for brands that “will help us connect even more intimately with consumers today.”
On the disclosure of the pending Altra acquisition, Rendle said in a statement that the transaction is another example of the company’s efforts to evolve its portfolio so it aligns with VF’s “enterprise value creation model.”
In the two years since Rendle took over as ceo and while he was president and chief operating officer before that, he has been working with his team on reconfiguring VF’s portfolio for future growth. The company last year completed the sale of its Licensed Sports Group, and in 2016 sold its Contemporary Brands business. It is now in talks with potential buyers for the Nautica business, which VF acquired in 2003 for $586 million.
VF has a large and growing presence in outdoor and action sports, and has identified workwear as a high-growth category. In October the group completed its acquisition of Williamson-Dickie, which operates in the workwear space. In November VF signed an agreement to acquire Icebreaker, a New Zealand brand focused on base layers and merino shirts.
Shares of VF rose 1.7 percent to close at $74.75 in Big Board trading.