The dealmaking scene in fashion, retail and beyond is beginning to resemble a holiday party that's just starting to get wild — and promises to make fools of some and happy marriages for others.The question is how long does the party last and how many deals get done before the heady cocktail of a roaring stock market, the strategic need for scale and innovation, outright desperation and nearly $1 trillion in private equity cash starts to sour?Big money can get spent when the future is uncertain and valuations are propped up by strength on Wall Street. Those who are looking to get out or take some money off the table sense — and with good reason — that the getting’s good.Take Frank Lowy, the 87-year-old chairman and cofounder of Sydney mall giant Westfield Corp., who this week cut a $24.7 billion deal to give his firm over to Paris-based Unibail-Rodamco, creating a $72 billion global force.“I think it’s appropriate to [sell] now — firstly, it’s a very good price for our shareholders and also from our point of view, I think we want to change our roles in the world,” Lowy said. “We would rather be investors than executives.”Brookfield Property Partners is also seeking scale with its $14.8 billion proposal to buy out the 66 percent of mall operator GGP Inc. it doesn’t already own.Those aren’t the only signs that — in the parlance of dealmakers — buyers have gotten out their elephant guns. The Walt Disney Co. agreed to acquire Twenty-First Century Fox Inc. in a $52.4 billion stock deal revealed Thursday.There is plenty of money to spend. Dealmaking data and intelligence firm Preqin said private equity firms added almost $100 billion to their cash hordes through the first nine months of the year and have $954 billion burning a hole in their power suit pockets.And in beauty — one of the few corners of fashion that has enjoyed runaway growth — the market is bubbling over.Anastasia Soare, founder and chief executive officer of Anastasia Beverly Hills, said last year: “I own 100 percent of the company, if you are curious about that. I don’t have any investment, and I’m not planning to get any [investment anytime] soon.” Now sources tell WWD the company, which could fetch a price tag in the billions, has hired Imperial Capital to explore a deal.On the innovation front, Target Corp. this week agreed to acquire Shipt, an online same-day delivery platform for $550 million in cash. The goal, as with many retailers, is to bulk up its logistics operations in order to better compete with Amazon and the increasingly resurgent Wal-Mart Stores Inc.With all this M&A activity in beauty and elsewhere, the one sector that continues to miss out is apparel — although there have been some high-profile bets. Carlyle, for instance, paid $500 million for half of Supreme New York and Neo Investment Partners took a stake in Victoria Beckham Ltd.“A lot of people who might consider themselves as never being a takeover candidate…given the valuations and the rise in the stock market we’ve seen, I think a lot of people would say, ‘Wow, this is a great price right now,’” said consultant Michael Dart, partner at A.T. Kearney.Dart said the deal activity would take place at the two poles of the market, with hot businesses being scooped up at strong valuations and weaker players getting rolled up into consolidations.Many of the big retailers that are struggling to find their way forward have been abandoned almost entirely by their traditional investor base. That toxicity — whether deserved or not — could now make them bigger takeover targets.“Is there a consolidation play?” Dart said. “The valuations they have relative to the rest of the market, that is an interesting risk/return [proposition]. I’d be very surprised if we don’t see more activity in retail looking for consolidation, looking for a real estate play.”But the mood in the market can shift quickly.“It’s hard to call the peak,” Dart said. “It keeps going up. I’ve been thinking we’ve been peaking for some time.”William Susman, managing director of M&A advisory Threadstone, said: “We’re at both peaks and troughs. It’s a year of confusion.”Susman said investors are making a “flight to quality” and pointed to Nordstrom Inc., which the Nordstrom family tried to take private with the backing of private equity Leonard Green & Partners, but had to hit pause on the process, as previously reported.“The fact that private equity was willing to do Nordstrom — flight to quality,” Susman said. “The fact that the banks weren’t, cash flow pressures.”Nordstorm has now kicked the can down the road until next year, when more deals are expected.“I think it’s a year of opportunity [in 2018], it’s a year that we’re going to continue to see transactions. Each company, every brand is doing what it believes is in its best interest. People are being forced to answer the question of, ‘Where will I be in five years?’” Susman said.And if the answer to that question isn’t someplace better than today, a deal could become much more likely.Another prominent banker noted: “I don’t think it can get that much more frothy. Everyone’s telling us the market’s going to come down next year, so it’s causing folks to basically figure out, ‘Hey, we’ve got to get to the market with this asset before the market goes away.’”For some of the younger, digitally oriented companies, that could be an unwanted pressure, particularly, since it’s not clear exactly how to value the digital natives and just how profitable those businesses will ultimately be.“There’s all these growth businesses, people are going to get leery if they don’t see some of the larger guys make money when they say they’re going to make money,” the banker said.That could open up a hole in the middle of the market.“We’re seeing a lot of small stuff that is getting to the point where it’s too big for venture [capital], not big enough for PE and expensive enough that the strategics are, like, ‘Wait a second, what is this?’ There is this risk that you end up in no man’s land.”Which is a particularly tough spot to be in with the market so hot.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews