Brands Briefing: The state of fashion M&A in 2025

This isn’t to say that there isn’t an appetite for deals. In fact, there have been various high-profile M&As in the last few months — from 3G Capital acquiring Skechers, to SB360 Capital Partners and ACON Investments snapping up True Religion, to Authentic Brands Group nabbing the intellectual property of Dockers. But, just as brands are feeling pressure from geopolitical tensions and strained consumer confidence, so too is the M&A world. And fashion, which is a highly competitive and highly discretionary category, is particularly seeing this play out.

“Bottom line, for clothing, accessories and wearables, this is a pretty challenging deal environment,” Eric Bellomo, senior e-commerce research analyst at PitchBook, told Modern Retail. In fact, Bellomo’s research for the past 10 years shows that “the apparel category is demonstrating some signs of structural decline,” thanks to a struggling middle tier and the rise of fast-fashion players like Shein, he shared.

This gets even more complicated when tariffs and low consumer confidence are thrown in, Bellomo said. “Dealmakers have way more uncertainty to factor into their processes, and they don’t want to stop and start these deals,” Bellomo said. “Until there’s more clarity on the macro environment, bankers and strategic acquirers are pretty disinclined to allocate resources to a diligence process, only to have them fall apart because of these headwinds.”

The apparel and footwear deals that are managing to go through mirror what’s happening in the larger economy, sources told Modern Retail. Today, many fashion companies are open to takeovers because they need a financial lifeline or a way to navigate ongoing volatility. The companies acquiring them, meanwhile, see an opportunity to diversify, scale or snap up competitors that are in a less strong financial position than they were before.

For instance, Capri — which sold Versace to Prada Group for approximately $1.4 billion — was under pressure to reduce debt after its failed merger with Tapestry. Its deal with Prada Group gave it another chance at survival. Dick’s Sporting Goods was able to enter the global market for the first time by acquiring Foot Locker — which has been on a turnaround for years — for $2.4 billion.

“When there’s dislocation of value, there are going to be some [players] that step in and take advantage,” Simeon Siegel, managing director and senior analyst at BMO Capital Markets, told Modern Retail. “We are seeing that.”

Patrick O’Quinn, managing partner at investment banking platform Axcel, sees apparel M&A as a splintered space. Businesses that are doing well “are tending to stay on the sidelines and are choosing not to raise equity rounds or seek out an M&A process,” O’Quinn told Modern Retail. But businesses on the other end of the spectrum — who need cash and need cash quickly — are in a different situation. “Even though it’s not the most opportune time [for a deal], they don’t have much choice,” O’Quinn said.

In fact, Andrew Dunst, managing director at The Sage Group, explained that “valuations are more muted than they’ve been over the last three or four years.” He attributed this, in part, to investors’ concerns about consumer spending. O’Quinn pointed this out, too, saying he has seen “a slight uptick in interest” in M&A, both on the brand side and the investor side. “But I wouldn’t say it’s translated to enhanced valuations,” he went on. “It might, in fact, be the other way.”

Take the Skechers deal, which came in at $9.42 billion, the footwear industry’s most expensive buyout to date. $9.42 billion was actually “quite an attractive price for 3G Capital,” Dunst said, considering how Skechers’ shares were down more than 20% for the year at the time. Skechers, Dunst believes, is an example of a company in which there was a “price mismatch” in the market. As Modern Retail has reported, Skechers has consistently gobbled up market share and grown its revenue over a multi-year period.

The best takeover targets, sources said, are ones that have strong business fundamentals. O’Quinn pointed to “relatively low customer acquisition costs and high repeat purchase rates” as important factors. A big international footprint can also be helpful for weathering market-specific issues, Bellomo said. Dockers, which Levi Strauss & Co. sold to Authentic Brands Group for $311 million, has been big in Europe. And Skechers said international sales represented 65% of its business in a recent quarter.

Still, not all deals in the last 12 months have been successful. In November, Capri and Tapestry called off their plans to merge, and the two are now embroiled in a legal battle. It’s a reminder that so much of this landscape also depends on regulatory approval, Bellomo said. “At the very high end, there can be some material headwinds, but there is a general kind of scrutiny, and diligence is taking longer in this environment,” he said. –Julia Waldow

How Newell Brands is using new products launches to ease tariff burden

Newell Brands, the portfolio company that owns home goods brands like Coleman and Yankee Candle, sees the most exposure from tariffs in one of its largest businesses. Graco, the children’s baby gear brand, is mostly sourced from a supplier outside of Shenzhen, China. Modern Retail spoke with Newell’s president and CEO, Chris Peterson, about how the company is moving forward to navigate the extra costs. 

What strategies is Graco implementing to mitigate costs associated with tariffs?
“We’re trying our best to try to minimize the cost and drive efficiency in our product design and drive new product innovation that can still represent a great value for consumers. The pricing range on baby gear is very wide. You have brands like UPPAbaby and Cybex and Nuna that may be pricing a car seat at over $1,000. And then you have very basic entry-level car seats that may be priced at $99. And we’re sort of in the middle, in the $300-$400 price range. So I think we’ve got a lot of opportunities to grow that business in this environment because our brands are going to represent better value for the people that were spending over $1,000. Those people may wind up trading down to Graco in this environment.”

What kind of product innovations has Graco introduced?
“We’ve just launched a Graco EasyTurn car seat this year that allows you to go from infant to toddler, and it has a new feature that allows the car seat to turn so it’s easier to get the baby in and out of the car, and it’s off to a great start. We’ve also launched the Graco SmartSense bassinet and swing that is priced at about $400 or so. When the baby is crying,  it moves the swing or the bassinet in a different direction and changes the music to try to soothe the baby, so it’s sort of self-soothing technology. And our product has more features and benefits than the Snoo product at about a third of the price. So that’s a good example of where we can bring value to a category with great innovation.”

How has Graco adjusted its pricing strategy in response to the new tariffs?
“We don’t operate in a category with very high margins. And so, with a 25% or 30% tariff being imposed, the cost was too big for us to be able to hold the line on pricing. And so we’ve taken our prices up to reflect that. But what we’re trying to do is innovate in a way that still provides consumers with a great value product. The SmartSense is a great example where, even if our price is up 20%, it’s still 60% less than the Snoo product.” –Melissa Daniels

Trends spotted at this year’s Fancy Food Show

At this year’s Summer Fancy Food Show in New York City, several food trends took over Javits Center as brands vied for attendees’ attention. The big through line at the event was indulgence, as brands are betting that customers want a little treat during challenging economic times. But there were other trends that broke through at the event, as some brands sought to put their own twist on the latest viral chocolate trend and, of course, continued to ride the protein wave.

Persistently Popular Pistachio
It’s no surprise that the pistachio-and-chocolate combination made a splash at this year’s Summer Fancy Food Show. The Dubai chocolate trend continues to dominate menus and social media feeds, and brands and food distributors brought their own spin to the event. 

Aside from a handful of the Middle Eastern-imported copycat bars, the flavor found its way into other formats. Pistachio spreads by startups Pistakio and Eden’s Sweet Ideas were two such examples from first-time exhibiting brands. But it wasn’t just chocolate-accompanying pistachio products that broke out at this year’s show. New York City-based nuts brand Live Loud Foods drew attention with one of its best-selling snacks, candied citrus pistachios.  

Veggie Vanguards
Vegetable-forward products are having a moment, as shoppers look for more ways to hit their health goals while still eating their favorite foods, according to the Specialty Food Association’s show report. On display were savory smoothies (dubbed VooZees) by smoothie brand Mojeto, which boast one cup of vegetables and 100 calories per pouch. There was also Atlanta-based Hot N Saucy, a vegetable-based hot sauce brand born from the pregnancy cravings of founder and chef Sam Davis-Allonce.

The Protein Wars Continue
Just when we thought the proteinization bubble had burst, new variations made their way to this year’s Fancy Food Show. There are still brands pushing additive protein sources, like a cookie brand called Taylor Chip, which boasts 30 grams of protein in one cookie. However, it was a refreshing change to see “real protein” show up in unexpected ways. Examples included tofu croutons by Croutinis, animal protein-based dips by Buffy Protein and salmon crackers by Samonyu. –Gabriela Barkho

What we’re reading

• Lululemon has sued Costco, alleging that the club retailer is selling knockoff clothing items that violate Lululemon’s patent and trademark rights, in a lawsuit that could have big implications for dupe culture. 
• How Olipop’s latest marketing stunt drew a 30,000-person waitlist.
• Amazon is asking some sellers to double their spend during Prime Day. 

What we’ve covered

• Today, as much as 6% of Kendra Scott’s online sales are now influenced by its AI copilot – more here on how the jewelry brand is using AI to spruce up its e-commerce experience. 
• To boost conversion, Kizik is investing in a few different marketing tactics this summer to show its hands-free shoes in action, including through a mobile tour and TV ads. 
• How brands like Flaus and Pashion Footwear are dealing with strained cash flow amid tariffs, which have forced many startups to place huge orders of inventory months in advance.