Xtep Once Again Invested Heavily in Saucony

Xtep International has announced the acquisition of the joint venture company associated with the premium running shoe brand Saucony for $61 million, along with securing 40% ownership of Saucony in China.

This deal, formalized through an agreement with Wolverine World Wide, Inc. (Wolverine), signifies the transformation of the joint venture established in 2019 between Wolverine Group and Xtep International into a wholly-owned subsidiary of Xtep. Moreover, XMS Sports Co. Limited, a fully owned subsidiary of Xtep International, will acquire 40% ownership in Saucony Asia IP Holdco, which possesses the intellectual property rights for Saucony in Mainland China, Hong Kong, and Macau. There's also a provision for XMS Sports to potentially increase its stake in Saucony Asia IP Holdco by 35% or 60%, contingent upon global sales or changes in Wolverine’s control.

Funded entirely by Xtep International's internal cash reserves, the acquisition is expected to be finalized by January 1, 2024. This move reflects Xtep's confidence in the growth prospects of both Saucony and Merrell brands and their commitment to tapping into their market potential in China. Analysts suggest that this acquisition will enhance Xtep International's influence over Saucony's operations in the Chinese market.

Since the joint venture's inception in 2019, Xtep has managed the Merrell and Saucony brands. According to Xtep International’s Chairman and CEO, Ding Shuibo, Saucony has seen a 100% annual growth rate in China over the past three years. In May, Saucony spearheaded the expansion into Xtep's new Shanghai Operation Center, and in the first half of this year, it became the first new brand under Xtep International to turn a profit. With a significant revenue increase in its professional sports division, reaching 344 million yuan, Saucony has expanded to 80 stores, and Merrell to 5 stores as of June 30, 2023.