The credit markets may still be tight for those looking for financing, but for anyone not yet ready to jump in, this is the perfect time to do one’s homework.
Chris Sciortino, a director of the investment banking unit of Robert W. Baird, said during a conference call last week that he expects it will be a year or two before the markets begin to loosen up and prospects for mergers and acquisitions start to improve. While there’s not an abundance of capital for investment yet, there’s still plenty of interest in the consumer sector among strategic and private equity firms.
“When [investors] jump in will depend on consumer spending,” he said.
He noted prospective buyers are being conservative because the consumer still seems to be pulling back. Still, investors are watching to determine when is the right time to make investments in the sector.
One key change will be that “more equity will be used in transactions, and less leverage used,” he said, noting the contrast from the past few years when relatively abundant liquidity allowed firms to leverage up on their acquisitions.
Another change is that firms will be focused more on high-quality concepts with prospects for vigorous growth. That’s a change from just before the subprime debacle a year ago when the “strength of the debt market” drove firms to consider even acquisitions where there was great cash flow and modest growth, but poor execution.
As the concerns over consumer spending grew, the pipeline for initial public offerings also shut down, Sciortino said. However, he expects the IPO market for the consumer sector to come back as well, once the current cycle reverses.
Many private equity firms “use the public market as a liquidity event for their portfolio,” he explained.
Metropark USA Inc., the lifestyle retailer founded in 2004 by chairman Orval Madden, who also founded teen retailer Hot Topic Inc. in 1988, is looking to go public in 2008.
“Our speculation is that’s a possibility, [but] by no means do we expect [an IPO] will be easy to get done in what we’re seeing in the environment today,” Sciortino said of the proposed timing for the Metropark IPO.
The director said it is “highly likely” the market will see other IPO filings once there is a positive change in the momentum in consumer trends. He noted specifically that high-growth retailers, or those that indicate earnings growth of 20 percent or more, will get rewarded by their ability to access the IPO market, giving their owners a measurement of liquidity for those businesses.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)