Apparel Brands secures a majority stake in Hype, further expanding its portfolio in the streetwear domain.
- The acquisition includes a 60% share in Hype, with an option to purchase the remaining 40%.
- Hype’s inventory management improved significantly prior to the acquisition, reducing SKUs from over 1,500 to about 500.
- New ownership opens doors to extensive B2B opportunities and supply chain optimisation for Hype.
- The strategic move aims to bolster Hype’s presence both domestically and internationally, with a focus on key wholesale accounts.
In a strategic move, Manchester-based Apparel Brands, known for its portfolio of streetwear labels, has acquired a 60% stake in Leicester-based kidswear and streetwear brand Hype. This acquisition not only strengthens Apparel Brands’ presence in the fashion sector but also offers a pathway to potentially acquire the remaining 40% from current owner Sarjan Dulai. Apparel Brands, established in 2017 with backing from True Capital since 2023, currently holds the licence to sell well-known labels such as Bench, Nicce, Farah, and more. The acquisition reflects Apparel Brands’ commitment to expanding its influence in the youth fashion market.
The acquisition follows a transitional period for Hype. Just last year, Sarjan Dulai acquired Hype in a pre-pack administration deal, and since then, the brand has undergone significant restructuring. Co-founders Liam Green and Bav Samani exited the business in March, marking a new era for the company under the leadership of CEO Mike Thompson. Over the past year, Hype has focused on improving efficiency, implementing a linear stock model that reduced inventory from over 1,500 stock keeping units (SKUs) to around 500. This streamlined approach has resulted in better performance and positions Hype well for future expansion.
With Apparel Brands’ acquisition, Hype gains access to new B2B opportunities and the benefits of supply chain optimisation through economies of scale. CEO Mike Thompson expressed enthusiasm about the partnership, highlighting it as a gateway to expanding Hype’s presence through Apparel Brands’ robust portfolio of brands. He envisions leverage across six or seven brands, enhancing Hype’s brand-building capabilities. This strategic alliance is expected to significantly bolster Hype’s operational capabilities.
Plans are already in motion to expand Hype’s physical footprint. Currently, Hype has key wholesale accounts, including 60 M&S stores, 100 WHSmith locations, and 120 Deichmann stores. Additionally, partnerships with major retailers like Next, John Lewis, and Zalando are in place. The company aims to shift towards a model with two-thirds pre-book and one-third variable order book, a strategy aimed at enhancing the international B2B portfolio over the next two to three years. Notably, there is keen interest from markets across the Gulf Cooperation Council (GCC) and India, indicating strong international appetite for the brand.
Apparel Brands’ founder and CEO, Peter Wood, has articulated a clear vision of building on Hype’s established reputation in youth fashion. He plans for Hype to become a leading authority for children’s and family apparel, focusing on everyday wear and essential back-to-school products. This acquisition is expected to not only reinforce but also rejuvenate Hype’s standing in the fashion industry while cementing Apparel Brands’ position as a formidable player in the kids’ fashion segment.
The acquisition of Hype by Apparel Brands marks a pivotal step towards strengthening its hold on the streetwear and kidswear market.
