Under new ownership, True Religion targets digital and international growth
Five years after emerging from its second bankruptcy, True Religion is continuing to turn its business around and now has new ownership.
The apparel brand was acquired by two entities: private equity firm ACON Investments and retail investment fund SB360 Capital Partners. The latter is chaired by Jay Schottenstein, CEO of American Eagle Outfitters. A press release announcing the news says that True Religion will continue to “operate independently” and keep its headquarters in California.
True Religion — which was previously owned by Farmstead Capital Management — reportedly began a sale process in January 2024. In a statement on Tuesday, True Religion CEO Michael Buckley said that under its new owners, True Religion is “poised to enhance [its] digital and retail capabilities, accelerate [its] international growth and continue innovating [its] apparel offering.”
“We look forward to working together as we bring True Religion’s bold, authentic style to even more consumers around the world,” he added.
The change in hands comes as True Religion continues to mount a turnaround. Founded in 2002, the company was once one of the biggest mall brands of the early aughts but struggled to stay popular in the 2010s as consumers embraced online shopping and flocked to other retailers. After declaring bankruptcy twice — once in 2017 and once in 2020 — True Religion took the last five years to update its assortment, increase its marketing efforts, pare back its price points and focus more on digital.
True Religion’s revenue has increased as a result; its sales totaled $280 million in 2023, up from $255 million in 2021 and $151 million in 2020. The brand also brought in $80 million in EBITDA in 2023, per CNBC. Still, True Religion is short of its goal of $500 million in revenue and faces competition from online marketplaces with lower prices.
Much of True Religion’s comeback efforts have focused on DTC. In 2022, the company announced plans to triple its online revenue and rolled out a new app to better capture mobile sales. It also grew its store fleet in recent months, especially in the U.S., which now has 51 locations. But the company has focused on wholesale, too, even vowing to double sales in that channel in North America from 2023 to 2026.
What’s more, True Religion has updated its merchandise by growing its women’s business, boosting its jewelry offerings and expanding into pet. In 2023, it brought on its first-ever chief marketing officer, Kristen D’Arcy, and under her watch, True Religion began partnering more with buzzy influencers and celebrities, including Megan Thee Stallion, Saweetie and Chief Keef. All the while, True Religion has continued to recruit new talent via its True Creators program for up-and-coming designers.
More widely, True Religion, like other early-aughts mall brands, is benefitting from a wider cultural nostalgia for the 1990s and 2000s. The brand is making its return at the same time that Levi, Gap and Abercrombie & Fitch are seeing their sales bounce back. “People want to be unique, and they’re digging up some of these brands from the past, and they’ve just been gaining momentum,” Gabriella Santaniello, founder of the consultancy A Line Partners, told Modern Retail.
Still, Santaniello pointed out that True Religion has made an important change since its first attempt. Back then, “it was very expensive and more of a luxury thing,” she said. Now, a pair of True Religion jeans hovers around $100 to $150, much lower than the $172 to $350 average in 2008. That update is likely to resonate with today’s cash-strapped shoppers, Santaniello explained.
CEO Buckley served as True Religion’s president from 2006 and 2010 before coming back in 2019 as chief executive. When returning to the brand, he felt that it had failed to stay current. “You have to know who your consumer is,” Buckley told CNBC in an interview last year. “The previous management… was still trying to market to who they thought that customer was in 2010.”
While True Religion has made progress on re-establishing itself as a modern brand, it still has room for improvement, Neil Saunders, managing director for GlobalData Retail, wrote in an email to Modern Retail. In particular, he cited the brand’s ability to grow internationally and said True Religion needed to work on “redefining its position and differentiation in the market.” True Religion expanded into China in March 2023 and entered India, Indonesia, South Korea, the Philippines, South Africa, Lebanon and Qatar in September 2023.
True Religion’s new owners could help fill in gaps to some extent, Saunders said. “I don’t think the deal, in and of itself, will completely revitalize the True Religion brand,” he explained. “However, the involvement of SB360 provides an avenue for improvement, as the shop is very focused on retail brands and has a good track record in the sector.”
SB360 Capital Partners is part of Schottenstein Affiliates, a network of companies that also includes American Eagle Outfitters, Aerie and DSW. Meanwhile, ACON says it’s managed more than $7 billion in assets since its inception in 1996. Its portfolio includes the collectibles brand Funko and hat company New Era Cap.