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.
“I’d been living in L.A. for the last year, and I felt like New York had such a need for a space where it can be just an oasis to take care of yourself,” said @cleanfooddirtycity of creating @clean.market, an upscale holistic wellness center in NYC. A market in the front of the shop sells a mix of clean beauty and skin products and apothecary-style items, while a cafe-style functional food and tonic bar is set up in the middle of the space, serving lattes and superfood smoothies. See more photos of the space on WWD.com. #wwdeye
“We don’t fight because we are just friends and respectful of each other’s projects. Max is even producing my solo album...I think what keeps us together is five o’clock white wine time,” said singer/songwriter @iamalexwinston of working with friend @alexmaax on their new EP “Crown.” Together they make up pop duo @postprecious, and their new EP is inspired by Hershenow’s devotion to the gay dance party scene. Head to WWD.com to read more about how these two artists came together. #wwdeye (📷: @dandoperalski)
@zoeisabellakravitz has been named the new international face and spokesperson of Black Opium, the women’s fragrance from @yslbeauty. The 29-year-old actress and musician, who has already served as the global ambassador of YSL makeup, will appear in the new campaign debuting on August 18. Get all the details on WWD.com . #wwdbeauty (📷: @zefashioninsider)
Influence mastermind Kylie Jenner and her cosmetics empire are going strong. But how might the surprise announcement that’s she’s no longer enhancing her lip affect her business? @hernameislex investigates. Link in bio. #wwdbeauty
Replete with 🔥 detail and a logo name tag, the Prada camp shirt began as a bold style statement on Pusha T at Governors Ball in early June. Now, it’s emerged as a favorite amongst street-style stars throughout the past month’s men’s collections, writes WWD Eye Editor @leighen. The flame-licked shirt also found a home on the one and only Jeff Goldblum, and seems to be the favorite for fashion gents this summer. And who can blame them? It works with track pants and Chanel sneakers, black trousers and bold glasses or worn open with a T-shirt and sneakers. But a winner may have been crowned. Per stylist Marc Goehring, himself a wearer of the look, #jeffgoldblumworeitbetter. #wwdeye #wwdmens
Exclusive: @longchamp is planning to stage its first official runway show at New York Fashion Week this fall. The French leather goods firm has expanded into ready-to-wear as part of its repositioning as a lifestyle brand. The show, scheduled for September 8, will also cap the brand’s 70th anniversary celebration. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @dominiquemaitre)
The Duke and Duchess of Sussex undertook their first overseas engagement as a married couple in Dublin. The trip included multiple events and outfits changes, including this black dress by @emiliawickstead that Meghan Markle wore for a party at the British Ambassador’s home. #wwdfashion #royals