Mergers and Acquisitions: Fashion Business News for Q4 2021

With established beliefs, fashion houses claim that fashion is all about storytelling and fine craftsmanship, while sustainability adds value as it makes the backstory even more impactful. Nonetheless, fashion as an industry is more than style but also about some major consortiums.

Garment manufacturers' clothing business transpired biggest deals in mergers and acquisitions in the fourth quarter of 2021. Ostensibly it seems that in the global M&A podium, fashion and luxury are a few of the most critical industries for business growth. While serial acquirers dominate this, M&A deals in the industry galvanized few spectrums:

• As the landscape of the apparel business undergoes a metamorphosis, acquisitions are being used as a financial tool to restart the long-gone profitability of the business.

• Industry and expert data analysts believe overseas deals are more profitable than domestic ones. The garment manufacturers' clothing business caters to management and sustaining business in the foreign markets. 

• In India, yarn manufacturers, such as Nakoda, are contemplating acquisitions, majorly with South Korean polyester factories and further in Korea and Taiwan. 

Potential Blocks

Certain factors are kept in close consideration when acquisitions are enforced to ensure that the process proves to be an enabler instead of a detractor.

• Cultural Shock: Usually, the dominant culture destroys the value proposition of the transaction, and therefore, efforts to embed the cultural elements of the acquired company into the changed program should be made.

• Insecurity: The acquired company becomes diffident, which hinders the process of achieving the goal. Thus, the strength of both the organizations in the consortium should be leveraged to take the organizational goals ahead.

• The propensity of decision-making: Cultural intelligence and foresight enable an efficient decision-making process regarding suitable styles and deadlines.

Recently, acquisitions in the garment manufacturers' clothing business are considered a potential and legitimate growth tactic. Consequently, it prevents businesses and potent ideas from winding up owing to the lack of inheritance. 

Nevertheless, an unmixed blessing is we all have, and therefore, the acquisition process with appropriate vigilance can augment the textile and apparel sector. This can be done by strengthening the weaker units and composing the strong ones as more vital. Bridging the gap, thereby, is quintessential.

The Log of Expositions 2021 Q4

Surpassing almost one and a half years from the initial Covid lockdown, the mergers and acquisitions show remains remarkably resilient and well-founded, as tabled by BDO corporate finance. The initial stop in transactions scheduled for Q2, the rebound in M&A seems quite promising than expected in Q4 of 2021.

Levi Strauss & Co. announced the acquisition of a lifestyle brand - Beyond Yoga. This shall mark the company's arrival into the activewear category.

Beyond Yoga, with its body positivity and inclusivity, is all set to join LS&Co. The brand portfolio includes Levi's, Dockers, Signature, and Denizen. Furthermore, the parent brand now expands Beyond Yoga's brick-mortar retail expertise while upscaling its digital presence.

The next breakthrough in garment manufacturers' clothing business comes as Wolverine World Wide Inc. sealed the deal with Fitness brand Sweaty Betty. The acquisition gave the shoe brand a higher stake in the competitive women's activewear species, marched ahead by Lululemon. It is expected to remain the same as it is between Saucony and Merrell, reflecting a commitment to e-commerce.

Finally, Kering Eyewear has completed the takeover of Lindberg, a Danish eyewear company. Poul-Jrn Lindberg and his consort started Lindberg in Denmark in 1969. Soon the brand emerged as a multinational company and a high-end manufacturer, replete with design orientation, lightweight body, and customized optical frames tinted in titanium.

While Kering, founded in 2014, distributed eyewear for 16 luxury brands, including Gucci, Saint Laurent, Balenciaga, Cartier, McQ, Alexander McQueen, Brioni, Bottega Veneta,  Boucheron, Chloé, Montblanc, Dunhill, Alaïa, Pomellato, and Puma.

Covid induced effects include the French Connection too. With its 'FCUK' branding, the suggestive UK fashion brand sold itself for 29 million pounds owing to the years of losses made worse by Covid. 

Of late, Louis Vuitton gave an opening for the acquisition of Tiffany & Co. A few days before the Farfetch-Alibaba-YNAP deal was cracked, LVMH and Tiffany came to terms. 

Following this, the renowned New York-based jewelry stalwart was brought under the ownership of the Paris-based luxury commodities brand- Titan. The deal says that against $15.8 billion, LVMH is set to acquire all shares in the publicly traded- Tiffany & Co. 

Last in the queue comes the G-III Apparel Group, which recently agreed to purchase, Sonia Rykiel. The plans stand to upscale the relaunch of the French fashion brand, scheduled for fall 2022. This deal comes just under two years after Eric and Michael Dayan successfully bid for all of the insolvent brand's assets via court-supervised processes. The deal is expected to close by the end-October, 2021.

Conclusion

The garment manufacturers' clothing business efficiently is that of high yields and high risks. Mergers and Acquisitions are often induced by profitability but also driven by losses and the urge to create new. Nonetheless, one of the highest stakes and bids profoundly falls in the fashion industry.