That’s still the mantra for some companies, whether for public firms looking for growth or financial investors hoping to unlock greater value down the road.
In 2013, it was financial players that did some of the biggest fashion deals of the year. The biggest was the $6 billion acquisition of Neiman Marcus Group by Ares Management LLC and the Canada Pension Plan Investment Board. Other notable transactions include Sycamore Partners’ $2.2 billion purchase of The Jones Group Inc. and its $600 million buy of teen retailer Hot Topic Inc.; Apax Partners’ takeover of teen retailer Rue21 Inc. for $1.1 billion; TowerBrook Capital Partners’ purchase of True Religion Apparel Inc. for $824 million and the acquisition of Lucky Brand from Fifth & Pacific Cos. Inc. for $225 million by an affiliate of private equity firm Leonard Green & Partners.
The Richard Baker-led Hudson’s Bay Co. bought Saks Fifth Avenue for $2.9 billion; LVMH Moët Hennessy Louis Vuitton acquired an 80 percent stake in Loro Piana for $2.6 billion; The Swatch Group Ltd. purchased Harry Winston for $1 billion, including debt, and Hanesbrands Inc. paid $583 million for rival Maidenform Brands.
There was also increased activity this year from brand management firms — the new acquirer model operates as a strategic, but can have the backing of a financial sponsor — seeking intellectual property assets to license out. Authentic Brands Group, which counts Leonard Green & Partners LP as a majority investor, acquired the IP assets of Juicy Couture from Fifth & Pacific for $195 million. ABG was particularly active in 2013, buying seven other brands, each for an undisclosed amount: Spyder Active Sports, Muhammad Ali, Elvis Presley, Graceland, Judith Leiber, Taryn Rose and Adrienne Vittadini.
Sequential Brands Group was another busy dealmaker on the brand management front, acquiring the Revo sunglass brand for $20 million, as well as the Franklin Mint for an undisclosed amount and the Ellen Tracy and Caribbean Joe brands for $62.3 million in cash and 2.8 million in the common stock of Sequential.
Citigroup analyst Oliver Chen expects to see more activity on the M&A front and for initial public offerings. “We should continue to see a healthy IPO market and a healthy mergers and acquisitions environment. There are opportunities for companies looking to grow through M&A, and for many to get attractive valuations in the public markets,” he said.
Investors in Europe are eyeing potential deals in the burgeoning contemporary and affordable luxury space. Among the names said to be readying for a sale process or actively hunting for investors are Carven, Eleven Paris, Chattawak, Sud Express and Tara Jarmon. The Kooples, a fast-growing contemporary chain, has attracted unsolicited offers from private equity firms. House of Fraser, which is eyeing the public market, is also in talks to be acquired by Galeries Lafayette. And Versace is said to have narrowed its short list of potential investors down to a group that includes CCMP, Investcorp and The Blackstone Group.
In the U.S., Phillip Lim, Alexander Wang and Thakoon are seen as attractive targets, given the buzz around advanced contemporary, although they may not be interested in a new investor. Nanette Lepore, also in the contemporary market, is mulling over investor options to help it expand.
While Sycamore Partners keeps coming up as the private equity firm still on the prowl for more deals, strategics such as G-III Apparel Group Ltd. and VF Corp. are names also mentioned. G-III was on the hunt for Jones Group before dropping out, while VF earlier in the year was in talks for Australian surf brand Billabong.
Activist investors are also pushing public companies to create shareholder value, often times in the form of putting themselves on the market. One example was Jones Group, after activist investor Barington Capital Group needled the company to boost results. The Clinton Group is exploring financing alternatives to taking The Wet Seal Inc. private, while Eminence Capital has been pushing The Men’s Wearhouse Inc. to negotiate a deal with its suitor, archrival Jos. A. Bank Clothiers Inc., which submitted a nonbinding offer of $2.4 billion. In an ironic twist, Men’s Wearhouse turned the tables and offered $1.54 billion to acquire its suitor, an offer that Jos. A. Bank turned down.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)