A surge in fourth-quarter mergers and acquisitions helped lift the value of middle-market M&A activity in the retail, apparel, footwear and restaurant industries last year.
A study by investment bank R.W. Baird & Co. said the number of deals valued at less than $1 billion in the sectors declined to 91 last year, down 20.9 percent from the full-year total of 115 in 2008. However, propelled by activity in the range of $100 million to $499 million category during last year’s final quarter, the value of those deals grew 32.5 percent to $9.29 billion from $7.02 billion in 2008.
In tracking deal multiples, Baird found a market leaning heavily in favor of buyers as the 2009 total came in at 6.6, compared with 7.8 in 2008 and 9.8 in 2007. The value was the lowest in any of the 12 years studied by Baird, supplanting the 2003 multiple of 6.9. Baird defines the multiple as enterprise value — equity plus debt minus cash — divided by earnings before interest, taxes, depreciation and amortization.
The increase in the value of deals within the four industries was attributable entirely to activity in the fourth quarter amid signs of an economic recovery. In the final three months of 2009, the number of deals rose to 24 from 22 in the previous year, but their value more than doubled, rising 125.3 percent to $2.84 billion from $1.26 billion.
It was essentially the middle of the middle market that pulled the numbers up. There were no disclosed deals in the $100 million to $499 million range in the fourth quarter of 2008, while those in its 2009 counterpart numbered eight with an aggregate value of $2.1 billion. Among these were Sally Beauty’s acquisition of Sinelco International, Billabong International’s purchase of Swell Inc., Genesco Inc.’s deal for Sports Fan-Attic Inc., Iconix Brand Group Inc.’s purchase of a stake in Mark Ecko’s brand portfolio and Li & Fung’s Wear Me acquisition.
The uptick supports the forecast of Joseph Pellegrini, managing director of Baird’s consumer retail team. Pellegrini said he expected a continuation of the flight to value in M&A, similar to the one going on with shoppers seeking bargains.
“It will be a mantra,” he said, noting that acquirers will remain selective and focused on companies for which their back-room savvy can provide immediate operating benefits. He’s also upbeat about the opportunities for a company such as Iconix to take acquired brands and give them new life by adjusting their distribution into markets more receptive to them.
“The days of making acquisitions for the sake of making acquisitions — that’s not working anymore,” he said.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast