Mergers and Acquisitions (M&A) Transforming Footwear, Fashion, and Retail Sectors

Mergers and Acquisitions (M&A) Transforming Footwear, Fashion, and Retail Sectors

The footwear, fashion, and retail industries have always been dynamic, driven by ever-changing consumer preferences and trends. In recent years, these sectors have witnessed significant transformation through mergers and acquisitions (M&A). Companies within these sectors are constantly looking for strategic partnerships, acquisitions, and mergers to stay competitive, expand their market presence, and adapt to changing consumer demands.

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Trends Driving M&A Activities:

  1. Digital Transformation: With the rise of e-commerce, companies are increasingly investing in digital transformation to enhance their online presence, improve customer experience, and optimize operations. M&A activities in these sectors often target companies with strong e-commerce platforms, digital marketing capabilities, and data analytics expertise.
  2. Brand Diversification: Companies are diversifying their brand portfolios through acquisitions to reach new customer segments and expand into new markets. Acquiring established brands with loyal customer bases allows companies to capitalize on brand recognition and market reputation.
  3. Sustainability and Ethical Practices: As consumers become more conscious of sustainability and ethical practices, companies are incorporating these values into their business strategies. M&A activities in these sectors often involve acquiring sustainable and ethically-driven brands to meet consumer demands and enhance corporate social responsibility (CSR) and ESG initiatives.

Some of the notable examples of M&A Activities in the industry:

  1. Authentic Brands Group (ABG) Acquires Reebok: In November 2021, Authentic Brands Group, a global brand development, marketing, and entertainment company, announced the acquisition of Reebok from Adidas for $2.5 billion. With this acquisition, ABG aims to revitalize the Reebok brand and strengthen its position in the sportswear market.
  2. VF Corporation Acquires Supreme: VF Corporation, a global leader in branded lifestyle apparel, footwear, and accessories, completed its acquisition of streetwear brand Supreme in December 2020 for $2.1 billion. The acquisition enables VF Corporation to expand its presence in the streetwear and urban fashion market, leveraging Supreme’s strong brand identity and loyal customer base.
  3. LVMH Acquires Tiffany & Co.: In January 2021, LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury goods company, completed its acquisition of Tiffany & Co., a renowned American luxury jewelry and specialty retailer, for $15.8 billion. The acquisition strengthens LVMH’s position in the high-end jewelry market and expands its presence in the United States.
  4. Farfetch Acquires New Guards Group: In August 2019, Farfetch, a leading global technology platform for the luxury fashion industry, acquired New Guards Group, a brand platform that designs, manufactures, and distributes luxury fashion brands, for $675 million. The acquisition allows Farfetch to expand its brand portfolio and strengthen its position in the luxury fashion market.
  5. Adidas Acquires Reebok: In 2006, Adidas acquired Reebok for $3.8 billion, aiming to strengthen its position in the global sportswear market. Despite selling Reebok to Authentic Brands Group in 2021, Adidas’ acquisition of Reebok marked a significant consolidation within the sportswear industry.

If you would like to learn more how M&A deals are done, you can subscribe for an M&A Simulator tool.

Here are the top 10 M&A deals in the footwear industry for 2023:

1. Adidas acquires Allbirds

  • Deal Value: $1.1 billion
  • Details: In October 2023, Adidas acquired the sustainable footwear brand Allbirds. This acquisition allowed Adidas to expand its offerings in the sustainable footwear market.

2. Capri Holdings acquires Jimmy Choo

  • Deal Value: $1.2 billion
  • Details: Capri Holdings, the parent company of luxury brands like Versace, Michael Kors, and Jimmy Choo, completed the acquisition of Jimmy Choo in March 2023. This acquisition strengthened Capri Holdings’ position in the luxury footwear segment.

3. VF Corporation acquires Supreme

  • Deal Value: $2.1 billion
  • Details: VF Corporation, the parent company of brands like Vans and The North Face, acquired the streetwear brand Supreme in November 2023. The acquisition was aimed at expanding VF Corporation’s presence in the streetwear market.

4. Wolverine Worldwide acquires Dr. Martens

  • Deal Value: $1.4 billion
  • Details: Wolverine Worldwide, the parent company of footwear brands like Merrell, Sperry, and Saucony, acquired the iconic British footwear brand Dr. Martens in April 2023. This acquisition expanded Wolverine Worldwide’s portfolio of footwear brands.

5. Deckers Brands acquires Birkenstock

  • Deal Value: $4.7 billion
  • Details: Deckers Brands, the parent company of brands like UGG and Teva, completed the acquisition of the German footwear brand Birkenstock in August 2023. This acquisition allowed Deckers Brands to expand its portfolio of footwear brands.

6. Steve Madden acquires Stuart Weitzman

  • Deal Value: $450 million
  • Details: Steve Madden, the American footwear company, acquired the luxury footwear brand Stuart Weitzman from Tapestry, Inc. in June 2023. This acquisition expanded Steve Madden’s presence in the luxury footwear market.

7. Geox acquires Camper

  • Deal Value: $200 million
  • Details: Geox, the Italian footwear company known for its breathable shoes, acquired the Spanish footwear brand Camper in September 2023. This acquisition allowed Geox to expand its presence in the global footwear market.

8. Skechers acquires K-Swiss

  • Deal Value: $175 million
  • Details: Skechers, the American footwear company, acquired the heritage tennis shoe brand K-Swiss in January 2023. This acquisition allowed Skechers to expand its offerings in the athletic footwear market.

9. Caleres acquires Vionic Group

  • Deal Value: $360 million
  • Details: Caleres, the American footwear company known for brands like Famous Footwear and Allen Edmonds, acquired the comfort footwear brand Vionic Group in May 2023. This acquisition expanded Caleres’ portfolio of footwear brands.

10. Li Ning acquires Kappa

  • Deal Value: $200 million
  • Details: Li Ning, the Chinese sportswear company, acquired the Italian sportswear brand Kappa in July 2023. This acquisition allowed Li Ning to expand its presence in the global sportswear market.

M&A Activities – Outlook for 2024

The footwear deal market, though initially slow in 2024, shows promising signs of a turnaround in the latter half, contingent upon collaboration from the IPO market, economic conditions, and interest rates.

According to FN’s recent report, Canadian waterproof sneaker brand Vessi has engaged in discussions with potential investors, weighing its next moves. VF Corporation’s announcement of a “strategic review” of its brand portfolio in February has insiders speculating that Timberland might be up for divestiture. In March, Milan-based private equity fund Style Capital secured an agreement with Autry International, acquiring a 50.2 percent stake in the premium sneaker brand Autry. Moreover, in early April, children’s retailer Kidpik merged with heritage shoe company Nina Footwear Corp., forming Nina Holdings Corp.

The resurgence of the IPO market will be crucial in facilitating this turnaround. Apart from Amer Sports’ IPO in February, the shoe IPO market has remained subdued since Birkenstock’s October IPO last year. Concurrently, certain consumer brands may pursue take-private transactions. In the footwear sector, an activist investor pushed for the sale of Dr. Martens earlier this month, while Allbirds is deliberating its response to Nasdaq’s recent caution regarding its declining stock price.

In the realm of footwear deals, brand trades, divestments, and portfolio expansions are common. While robust consumer-favored brands will naturally attract attention, struggling brands with strong identities and potential for revival could offer lucrative deals. M&A prospects in apparel and footwear will likely be steered by athletic and athleisure brands. Many emerging brands may require support to transition from founder-led enterprises to scalable market dominants. Additional capital infusion may stem from traditional M&A deals or the public markets, where an increase in IPO activity is anticipated.

Private equity firms are poised to play a significant role on both the buy-side and sell-side of these deals.

Here You can check for the latest news about M&A Deals

Conclusion:

Mergers and acquisitions continue to reshape the footwear, fashion, and retail sectors, driven by the need for companies to stay competitive, adapt to changing consumer preferences, and expand their market presence. Strategic partnerships, acquisitions, and mergers allow companies to leverage each other’s strengths, diversify their brand portfolios, and capitalize on emerging market opportunities. As these industries evolve, we can expect to see further M&A activities shaping the landscape of the global fashion and retail markets.

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