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Biggest Deals of 2020: M&A Stays Active Despite Pandemic

Surprisingly, there were some key mergers and acquisitions in 2020 in spite of the disruption caused by the coronavirus pandemic.

Some planned deals, such as Sycamore Partners’ transaction to acquire a 55 percent majority stake for $525 million in Victoria’s Secret from L Brands Inc.—valuing the total transaction at $1.1 billion—went by the wayside after the private equity firm had second thoughts. Overall, though, the M&A market remained active.

Below are some of the fashion deals in 2020 listed by size of transaction. Some were not included because the purchase price wasn’t disclosed. One example is the Jan. 13 deal in which Farfetch acquired streetwear brand Opening Ceremony.

Here are the top deals in 2020:

Tiffany & Co.

American jewelry firm Tiffany & Co. is slated to be acquired by LVMH Moët Hennessy Louis Vuitton in a $15.8 billion deal that’s expected to close in early 2021. The transaction was inked last year for $16.2 billion. LVMH initially balked in the wake of Covid-19, but eventually agreed to complete the deal after the parties negotiated a $400 million discount. Many on Wall Street had believed the deal would eventually go through at a reduced price tag since LVMH chairman Bernard Arnault has long had his eye on the jewelry retailer. Tiffany shareholders voted to approve the deal earlier this week.

Asda

U.K. supermarket chain Asda will revert back to British ownership when billionaire Issa brothers and private equity firm TDR Capital close on its $8.79 billion deal for a majority stake in the retailer. Walmart Inc., which is selling the majority stake, will retain a minority stake in the supermarket chain. Walmart still sells Asda’s George apparel line among its men’s wear offerings.

Future Group

With regulatory approval in hand, India’s largest retail group Reliance Retail will acquire the nation’s number-two chain Future Group in a deal valued at $3.4 billion. The deal will give Reliance another 1,800 doors from Future Group, which operates stores under nameplates that include Big Bazaar, Central and Foodhall.

Taubman Centers

Simon Property Group is set to pay $3 billion to acquire an 80 percent stake in its competitor, Taubman Centers. The two inked their agreement in February, but after the Covid outbreak that began in March, Simon tried to walk from the deal. A few months later, and after some legal wrangling, the parties agreed to a $600 million discount from their original $3.6 billion price tag.

Supreme

VF Corp. inked a $2.1 billion deal to acquire Gen Z-beloved streetwear brand Supreme. The apparel giant acquired the stakes held by private equity firms The Carlyle Group and Goode Partners, as well as by founder James Jebbia. Jebbia and his senior leadership team will remain with the company and work out of the brand’s NYC headquarters. While the price tag doesn’t get Supreme accolades as a megabrand at the level of a Tiffany, despite cult status among streetwear lovers, give it time. Of the deals announced in 2020, Supreme is still in the early stages of growth. VF can help incubate and nurture a brand that has plenty of expansion possibilities and a strong runway for growth ahead, making Supreme the one to watch in the years to come.

Seiyu

Walmart is selling an 85 percent stake in its supermarket chain Seiyu for $1.65 billion to KKR & Co. Inc. and Japanese e-commerce platform Rakuten Inc. The American discounting giant will retain a 15 percent minority stake in the business. KKR will own a majority stake at 65 percent through its Asian fund, Rakuten at 20 percent and Walmart will retain a 15 percent share. Seiyu’s current CEO will stay on at Walmart in a new role.

Stone Island

Moncler SpA will take a majority stake in the owner of rival luxury sportswear brand Stone Island for $1.4 billion. Moncler’s will acquire its stake from the ski wear brand’s parent SPW from owner Carlo Rivetti and members of his family. SPW in turn will acquire the remaining 30 percent stake from Singapore’s state investor Temasek. The deal gives Moncler the ability to grow its base in the direct-to-consumer channel where Stone Island has a strong presence among the younger consumer group.

Farfetch and Farfetch China

Farfetch is joining forces with Chinese retail company Alibaba and Swiss luxury firm Richemont in a deal valued at $1.15 billion. Alibaba and Richemont will each investment $300 million in luxury e-tailer Farfetch, and the two also will each invest $250 million for a combined 25 percent stake in Farfetch China. In addition, Paris-based Groupe Artemis has invested $50 million to increase its stake in the luxury e-tailer. Farfetch’s chairman, CEO and cofounder José Neves said the investments are a validation of the company’s position as “the global platform for luxury.”

Shoe Palace

British athletic retailer JD Sports wanted to expand its U.S presence, particularly on the West Coast so it went ahead and acquired American streetwear chain Shoe Palace for $325 million. The transaction gives it a base of 167 stores. JD operates in the U.S. under its JD brand and Finish Line, which it acquired two years ago for $558 million. Members of the Mersho family founded the American retailer in 1993, and four brothers, who head up different operating functions, will continue to run the business.

Joseph Abboud

The Joseph Abboud brand found itself under new ownership this year after Tailored Brands sold the business to brand management firm WHP Global for $115 million. Despite Tailored Brands’ best efforts to lower its debt load and ease financial pressures, the company had to file for Chapter 11 bankruptcy court protection in August. The restructuring helped the men’s wear retailer eliminate $686 million in debt, and it was able to exit bankruptcy proceedings in December.

Umbro China

Iconix Brand Group sold its Umbro China business for $62.5 million to HK Qiaodan Investment Ltd. The sale includes the rights to sell the sports brand in the People’s Republic of China, Hong Kong, Taiwan and Macau. Iconix, which paid Nike $225 million for the British soccer brand in October 2021, still retains ownership of the Umbro brand.

MeUndies

Financial investor Provenance invested $40 million for a minority stake in the digitally native sleepwear brand MeUndies. The investment will help the company build its online customer community and expand omnichannel operations into international markets and physical locations.

StockX

The online marketplace, which started as a sneaker resale platform before expanding to other categories, raised a $275 million Series E round that values the company at $2.8 billion. StockX said the funding—led by Tiger Global and includes new investors Altimeter Capital, Sands Capital and Whale Rock Capital Management—will help the company accelerate its global expansion, invest in product innovation and add category diversification.

 

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