After a few years of quiet, fashion’s mergers and acquisitions market is heating up. Today it was announced that retail conglomerate Phillips van Heusen would indeed take on Tommy Hilfiger. And yesterday, struggling high street store French Connection said it would sell Nicole Farhi to Los Angeles private equity firm OpenGate Capital.
Why all the action? Well, after years of recession, investors are excited about fashion again. Right now is a good time to buy small companies with big potential.
A few familiar names that will likely make some moves over the next six months:
LVMH–The French luxury behemoth usually does its shopping in August, the slowest month of the fashion year, in order to keep things fairly quiet. Last year, it bought a luxury yacht company. This year, who knows? Brands that the firm has shown interest in include Rodarte and Gareth Pugh.
Permira–The London-based private equity firm is reportedly shopping around its two fashion companies–Valentino and Proenza Schouler. But if the firm does indeed sell of these properties, will it invest in others? We wouldn’t be surprised if it’s looking at Alexander Wang, who attended the Valentino runway show last week. With $25 million in annual sales, Wang’s company is ripe for major investment.
Hermes–In December, the family-owned company, which also owns high-end cobbler John Lobb, announced that it would purchase China-based luxury brand Shang Xia. Hermes boasted incredible numbers throughout the recession, which leads us to believe that it’s feeling ultra-confident right now about its business model.