ue of the deals, however, has not been disclosed by the firm.  So why did the large omnichannel fashion retailer choose to acquire an existing brand rather than create its own activewear range, and how does it believe it will succeed in a saturated market segment?  What led to the partnership? Dione Song, CEO of Love, Bonito, told Inside Retail she first noticed the Butter brand when she saw the excitement of one of her staff opening e-commerce packages from Butter.“We were curious about this brand and the reason why everyone was so enthralled with it,” said Song. “For us, that spoke a lot. “We started asking around the industry and researched a little bit more and realised Butter was not just catering to a wide demographic of Gen Zs and millennials, but also had credibility within the fitness community. It was already getting very strong traction.”  However, the Southeast Asian fashion company’s decision to acquire Butter was not only based on popularity and reputation. Despite what Song sees as a crowded activewear market, the Butter team is passionate and knowledgeable about the industry, and has found a unique approach to set the brand apart.  From left: Love, Bonito’s Dione Song and Rachel Lim, and Butter’s Olivia Yiong and Tiffany Chng. Butter was founded in 2020 by Singaporean entrepreneurs, Olivia Yiong and Tiffany Chng, to offer affordable activewear designed for Asian body types, with sizing from XXS to XXL. The brand also offers 13 colourways that are flattering to the Asian skin tone. It recorded $500,000 in revenue in its first year of operation with just five products and is on track to achieve 138 per cent year-on-year growth.  “Tiffany and I were inspired to start an activewear brand simply because we couldn’t find chic, affordable pieces that fit our Asian body types well,” said Yiong. “Fast forward two years, we’ve grown Butter from two products to 12 unique styles, and also created a community of passionate, like-minded women in the fitness space.” “For us, it was a natural fit,” Song said. “Because if we were to approach active, maybe we would have done it that way.” Before the foundation of the partnership, Song and Love, Bonito’s co-founder Rachel Lim met several times with the Butter co-founders and discovered “great synergy” in their perspectives. “At the end of the day, of course, M&A is a partnership. It is a marriage,” Song added. “Values are aligned, and principles are aligned. It makes sense. It boils back down to our mission, who we are as a brand and for us, our mission is to empower the everyday Asian woman.” Unique value proposition as a competitive point While the flourishing activewear sector is not a new phenomenon, the Covid-19 pandemic has had a significant impact on how people dress, with the work-from-home trend fuelling sales for leading activewear players like Lululemon and Ariel, and prompting others, including Kim Kardashian’s shapewear brand Skims, to enter the market.  “The distinctions between athleisure, activewear and ready-to-wear fashion are becoming increasingly blurred. The acquisition is much more logical in this regard, which is why we wish to distribute it at Love, Bonito,” said Song. “What we saw was an acceleration over the last couple of years. During the pandemic, the boom of activewear accelerated even more and it’s here to stay.” Major players, including Lululemon and Vuori, are setting their sights on the Asian market, aiming to further capitalise on the activewear’s growth before demand slows down.  During the past year, Lululemon has ramped up its expansion plans in Asia, saying it is on track to make China its second-largest market by 2026 through extensive store expansion. In Hong Kong, where Love, Bonito currently has a presence, the Canadian brand recently landed its first street-front two-storey flagship on Queen’s Road Central before rolling out its largest store in South Korea, its biggest in Asia outside of China.  Asia Pacific’s activewear market was valued at US$125.6 billion in 2020 with top brands being Nike, Adidas and Li Ning, and is projected to reach a five-year compound annual growth rate of more than 8.5 per cent from 2021 to 2025, according to GlobalData.  As the fierce competition continues, Cheak needs to differentiate to outperform its rivals.  “Cheak’s unique value proposition is about female centricity or female Asian centricity, which is very in line with Love, Bonito’s approach to fashion,” said Song. This can be seen in the brand’s sizing, which is designed to “fit and flatter” Asian women’s body shapes, and the colour scheme, which is not limited to the usual dark or neutral colours seen at other brands.  “It’s like ‘Fenty of activewear’ in a way they are approaching this entire category,” she said. While it may be too early to tell if that is enough to attract the growing number of young consumers in this competitive space, Cheak’s price point is certainly likely to help the brand lure new customers as it positions itself as an affordable activewear brand.  “We want to provide high-quality, trendy products that are Asian-centric but also still at an affordable price point that most women can afford and doesn’t burn a hole in their pocket,” Song said.  “If a customer comes in, she will be able to mix and match very easily in one purchase. Maybe she buys the Cheak activewear and pairs it with a blazer or outerwear from Love, Bonito. She could easily wear that to the office, and we see a lot of that happening right now.” Eyes on expansion  Cheak’s product range is currently being sold through its e-commerce store and in selected Love, Bonito’s stores. Song said that as part of the partnership the company will support Cheak’s expansion in the region, starting with distributing the products through Love, Bonito’s network of stores in Singapore before rolling out across its stores in Malaysia, Indonesia and Hong Kong, during the next couple of years. She added the company will support the brand to open a Cheak flagship store in the region.  “For us, it is about how can we support and enable the brand to scale better to distribute to more markets,” she said. However, Song’s growth ambitions are  not limited to Cheak. Further international expansion is on the agenda for the Love, Bonito brand, with eyes on the world’s largest apparel markets.  “The US is one of the big bet markets for us that we want to double down on,” Song told Reuters, which reported this month that the company is preparing for an IPO.  While she declined to discuss any IPO plans with Inside Retail, she has conceded recently they “are definitely on the mid-term horizon”.   “A lot of Asian ex-pats, including Vietnamese, Malaysians and Singaporeans, are based in Western markets like the US and Australia. There are not many brands that fit them very well because these brands don’t cater to a lot of the minorities in the market.” Love, Bonito already has an online presence in the US to test the waters ahead of setting up its US team this year to increase brand awareness there.  “We have seen a lot of orders coming in first on the East Coast, then on the West Coast, then other states like Texas and Florida. We started dialling and doing a little bit more influencer seeding and social media content. We’re very excited because the US has been growing exponentially on e-commerce.” Love, Bonito’s first pop-up store in the US is scheduled to open next year, followed by a permanent rollout, according to Song. The brand also plans to launch a physical presence in the Philippines next year, where it has recorded “great traction” as online sales grow exponentially. Closer to home, Song said Love, Bonito’s expansion strategy in the coming years will mainly focus on further expanding its physical presence in its key markets – Singapore, Malaysia and Indonesia.  Love, Bonito may still be a young brand, but its acquisitions and growth strategy suggest this Singaporean-born label may be set to become an international powerhouse.  ​​“As Love, Bonito evolves into the next stages of growth, we want to join forces with like-hearted female founders and brands to make a difference and impact the lives of Asian women globally,” said co-founder Rachel Lim.  “Our vision has always been to journey with a woman through the different aspects and stages of life – and this acquisition allows us to do so meaningfully.”