Market Monitor: Apparel, Accessories & Footwear
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Market Monitor:
Apparel, Accessories & Footwear
Making the right decisions for your business starts with having the most accurate and current information available. Our Apparel, Accessories and Footwear Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry’s M&A trends.
Activity Heats Up in Apparel, Accessories & Footwear Despite Economic Challenges
Consumers have faced economic headwinds with inflation and high interest rates, leading to a slowdown in Apparel, Accessories & Footwear (AAF) spending in 2023. However, this hasn’t stopped M&A activity in the sector.
Valuation Metrics Rebound
While transaction activity has slowed, valuation metrics for publicly traded AAF companies have rebounded to pre-downturn levels (average of 2021-2023). This suggests continued investor confidence in the long-term potential of strong AAF businesses.
Success Through Strategic Management
Recent earnings reports from Q4 2023 reveal positive surprises from several AAF companies. Notably, casual fashion brands like Gap, American Eagle, Abercrombie & Fitch, and Carter’s exceeded expectations. Additionally, discount retailers like Kohl’s, Burlington, and Dillard’s also reported strong earnings.
A key factor in these successes appears to be effective inventory management, allowing companies to offer competitive prices in a cost-sensitive market.
M&A Outlook: Strong Players Remain Attractive
Well-positioned AAF companies with characteristics like high growth potential, strong margins, and efficient inventory management are likely to remain attractive targets for both strategic and financial buyers. These companies can expect premium valuations in M&A activity.
For more information or questions, please contact our contributors:
Rich Anderson, Managing Director: [email protected]
Tyler Dale, Managing Director: tdale@
Johnny Sherwood, Director: jsherwood@
Brennan Anderson, Vice President: banderson@
