Biggest Fashion Acquisitions & Footwear Year End Review 2022 – Footwear News

The year closed with a string of acquisitions, but overall, M&A activity in the footwear and fashion industries has been relatively quiet this year compared to 2021’s gangbuster deals.

Several factors contributed to the slowdown in deal-making, ranging from price inflation, which causes volatility in the stock market, to rising interest rates and falling consumer spending.

But in some corners of the industry — especially in the still-booming athletics category and the recession-proof luxury market — certain properties are proving to be hot commodities, most notably Tom Ford, which netted one of the year’s big price tags.

Below is a list of some of the biggest M&A deals in the footwear and fashion industries in 2022, in no particular order.

Tom Ford

After much speculation, Estee Lauder Companies beat rivals Kering in a contest to win the Tom Ford brand. ELC announced in mid-November that it had signed a deal to acquire the fashion label for $2.3 billion, making it the sole owner of the Tom Ford brand and all of its intellectual property. Under the terms of the agreement, founder and CEO Tom Ford will continue to be the brand’s creative visionary until the end of 2023. And chairman Domenico De Sole will remain as a consultant until then.

Poshmark

Korean internet company Naver Corp., which runs the country’s largest search engine and e-commerce platform, disclosed in October its plans to acquire Poshmark Inc. and all shares issued and outstanding for $17.90 in cash, or $1.2 billion. The deal, which will close in Q1 2023, is expected to jump-start annual revenue growth of over 20% in the short term by giving Poshmark access to Naver’s financial and technology infrastructure to expand growth overseas.

Karl Lagerfeld

In May, G-III Apparel Group entered into a cash deal to buy the remaining 81% stake in fashion brand Karl Lagerfeld for 200 million euros (or about $213 million in the current exchange). G-III has owned 19% of the brand since 2015, and the company says the deal is in line with its goal of increasing direct ownership of the brand and expanding globally. Karl Lagerfeld’s leadership team, led by CEO Pier Paolo Righi, is expected to continue working closely with G-III, which manages more than 30 licensed and owned brands such as DKNY and Andrew Marc. The company says it plans to help Karl Lagerfeld eventually achieve more than $2 billion in global retail sales.

J.D. Sports

After a series of investments in 2020 and 2021, JD Sports Fashion Plc is focused on divestment this year. This month, they sold 15 UK-based “non-core” fashion businesses to Frasers Group Plc in a deal worth 47.5 million pounds, or $57.6 million at current exchange rates.

The retail giant also announced in August that it would sell Footasylum to German asset management firm Aurelius for 37.5 million pounds, or $46.3 million at current exchange rates. JD Sports acquired the shoe chain in 2019 in a $119 million deal that quickly caught the attention of UK watchdog organization the UK Competition and Markets Authority. In 2021, CMA ordered JD Sports to sell Footasylum after an investigation found consumers would suffer from intense competition due to its ownership.

WHP global

In one of its two major deals this year, WHP Global bought a controlling 70% stake in fashion brand Isaac Mizrahi from Xcel Brands Inc. in May. Under the deal, valued at $68 million, Xcel retained a 30% minority interest in Isaac Mizrahi and received $46.2 million in cash. Xcel also said it will continue to manage QVC’s fast-growing Isaac Mizrahi business with WHP Global and enter into a new licensing agreement to design and distribute the brand’s apparel in the US and Canada. Mizrahi also remains as the company’s chief design officer.

WHP’s next big move, in early December, was a partnership to help the struggling Express network. WHP Global invested a total of $260 million into the fashion retail chain to form intellectual property joint ventures and “mutually transformative” strategic partnerships to launch new omnichannel platforms. The multi-layered agreement includes a $235 million investment from WHP Global for a 60% interest in the joint venture. Express retains a 40% stake and says the deal will allow it to scale internationally and into non-core categories through a licensing deal.

Authentic Brands Group

It wouldn’t be an M&A closing without including Authentic Brands Group. In October, the New York-based company finalized the acquisition of Ted Baker after announcing a deal to acquire the UK-based brand in August. ABG reportedly bought Ted Baker for 110 pence per share, or about 211 million pounds (about $261 million at current exchange rates) — a price that was about a third lower than the company’s initial estimates. ABG said it seeks to grow Ted Baker’s global foundation by focusing on licensing, wholesale, retail, digital and strategic marketing partnerships.

And earlier in the year, in February, ABG signed a deal to co-own and co-manage David Beckham’s global brand. The terms of the deal, which made Beckham a shareholder in ABG, were not disclosed CNBC estimates that ABG paid nearly $269 million for a 55% stake in Beckham’s brand management company, DB Ventures.

Arklyz Group

May is a big month for Arklyz Group. Over the course of several days, the company announced a deal to buy Asphaltgold, a leading European retailer of sneakers and streetwear; and Shoe City, a Baltimore, Md.-based sneaker and streetwear chain. With the Shoe City deal, Arklyz Group is adding 40 doors to its list of retail locations in the US, which already includes more than 50 The Athlete’s Foot stores across 12 franchisees. The Athlete’s Foot network also gains access to a Shoe City distribution center which can be used to fill orders for both banners. Arklyz CEO Param Singh told FN that when it comes to potential acquisition targets, he looks for businesses that are in the market with “strong brand relationships” and a “loyal consumer base”.

Goat Group

GOAT Group took steps this year to grow its clothing business by buying men’s fashion resale site Grailed. The cash and share deal was announced in October and is intended to accelerate growth in the apparel and accessories category for both companies, through a combined global community of more than 50 million members in 170 countries. The two companies are already close partners. In September 2021, Grailed announced just that it closed a $60 million Series B funding round, which lpublished by GOAT Group.

Aerosol spray

In January, American Exchange Group (AX Group) finalized a deal to acquire footwear brand Aerosoles from New York-based hedge fund Alden Golden Capital LLC for an undisclosed amount. AX Group has previously entered into a distribution partnership with Aerosoles to drive expansion into more retail channels. Now, the new owners tell FN they have an ambitious strategy to take the 35-year-old brand into a variety of new product categories and re-establish its dominance as a fashion-based convenience player.

Designer Brand

Designer Brands Inc. adding another name to his growing list of brands this month. Parent company DSW announced on December 19 that it had acquired Topo Athletic, a US maker of running, walking, hiking, and comfort shoes. With the purchase, DBI expands its collection of athletic performance footwear and evolves its brand strategy. (DBI announced in April a target for sales of its owned brands and those owned and licensed by the Camuto Group to double from 19% of revenue to nearly a third by 2026.)

In July, DBI announced its investment in Le Tigre 360 ​​Global and entered into a license agreement to design and manufacture Le Tigre footwear exclusively. And in May, DBI acquired “key strategic retail domain ‘Shoes.com’ and related intellectual property assets” for an undisclosed amount. A spokesperson for the company noted that domains and IPs were carved out as part of the sale, and Designer Brands did not purchase the underlying operational business assets.

Fleet Feet

Custom running retailer Fleet Feet announced in June it would acquire fellow running retailer Marathon Sports, based in Waltham, Mass. The deal also includes a pair of Marathon banners — SoundRunner and Runner’s Alley — and Marathon’s e-commerce business. The transaction coincided with the retirement of Colin and Penny Peddie, owners of Marathon Sports, although the rest of the chain’s leadership team remained in place and the store continued to operate as separate entities under the Marathon Sports, SoundRunner, and Runner’s Alley banners.

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Richemont completed the long-awaited deal in August, selling a majority stake in the Yoox Net-A-Porter (YNAP) platform to Farfetch and Symphony Global, one of Mohamed Alabbar’s investment vehicles. The parties entered into a “significant transaction” in which Farfetch and Alabbar acquired a 47.5% stake, and a 3.2% stake in YNAP, respectively. Farfetch will then acquire 100% of YNAP within three years, subject to certain conditions.

Farfetch closed its new investment in Neiman Marcus Group (NMG) on May 31. The UK-based online shopping platform secured a $200 million minority common equity investment in NMG, joining existing investors including PIMCO, Davidson Kempner Capital Management and Sixth Street. Farfetch said its investment will be used to further accelerate growth and innovation in the Texas-based retailer’s technology and digital capabilities.

And earlier in the year, Farfetch acquired luxury beauty retailer Violet Gray for an undisclosed sum. The acquisition precedes a beauty launch on Farfetch Marketplace later in the year.