Fashion’s M&A Market is Heating Up

After a prolonged slowdown, fashion’s M&A market is springing back to life. A combination of falling interest rates, shifting investor sentiment and optimism around economic policy has fuelled a wave of early 2025 deals. Within the first few weeks of the year, brands like True Religion and Kapital were acquired by private equity firms and holding companies, signalling renewed confidence in fashion investments.However, not all acquisitions are about aggressive growth. Some buyers specialise in “managed decline,” acquiring struggling brands to extend their lifespan through licensing or cost-cutting. Others, including private equity firms and strategic buyers, see opportunities to scale promising brands by injecting capital and expertise.“The key for a lot of these companies in finding buyers is proving that their brands are still worth it and can weather these economic cycles and lulls in the market,” shared e-commerce correspondent Malique Morris. Executive editor Brian Baskin and senior correspondent Sheena Butler-Young sat down with Morris to break down the latest deals, the brands poised for sale, and what it all means for fashion in 2025 and beyond.Key Insights: A number of converging factors are driving a new wave of fashion mergers and acquisitions in 2025. Falling interest rates, Trump’s re-election driving investor optimism, and shifting regulations have all played a part in fuelling new acquisitions. “Retailers reported strong holiday sales in 2024, and even though much of that was driven by discounting, it signalled that consumers were still spending,” says Morris. “That kind of activity gives investors more confidence in backing fashion businesses.”Buyers are looking for brands with strong customer loyalty, an engaged audience, and clear growth potential that can weather the ebb and flow of the market. Brands need “good stewards to help them find the best resources to expand without hurting their legacy, whether that be money, retail networks, or supplier relationships,” explains Morris. “It's important to have the resources you need to maintain relevance and compete for consumer attention.”Beauty remains a hotbed for M&A activity. “Unlike fashion, beauty hasn’t faced the same investor hesitancy,” says Morris. “Brands like Merit, Westman Atelier, and Makeup by Mario are seen as prime acquisition targets, while Rare Beauty could be the defining beauty deal of the decade.”Overall, buyers are prioritising brands with strong customer loyalty and cultural relevance. “They're seeking brands with ample customer loyalty and a passionate consumer base that will keep their names in the public consciousness, irrespective of what recent sales growth will look like,” says Morris. He adds, “The thing that is top of mind is, what is the value of your brand? That’s an honest conversation that I’m not sure all companies have with themselves, let alone with buyers.”Additional Resources:What’s Behind the 2025 M&A Wave | BoF Fashion’s Most Anticipated M&A Hot Spots in 2025 | BoF Hosted on Acast. See acast.com/privacy for more information.

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