Fashion M&A Update for 2025: Brief Overview

The fashion industry is facing a challenging landscape when it comes to mergers and acquisitions, with a significant decline in global deals in the apparel and accessories sector. Research data from PitchBook shared with Modern Retail shows a 40% decrease in M&A deals from the second quarter of 2024 to the second quarter of 2025. Furthermore, the time taken for deals to close has increased, with the average number of days to close rising from 58.5 days in 2024 to 71.7 days in 2025.

Despite the decline in M&A activity, there have been notable high-profile acquisitions in the fashion sector recently. Brands like Skechers, True Religion, and Dockers have been acquired by 3G Capital, SB360 Capital Partners, ACON Investments, and Authentic Brands Group, respectively. However, the challenging environment in the fashion industry is magnified by geopolitical tensions and consumer confidence issues, affecting both brands and M&A deals.

Eric Bellomo, a senior e-commerce research analyst at PitchBook, highlights the challenging deal environment for clothing, accessories, and wearables. Over the past decade, he notes a structural decline in the apparel category, attributed to the rise of fast-fashion players like Shein and the struggling middle tier market. The impact of tariffs and low consumer confidence further complicates M&A deals, with dealmakers facing uncertainty in the midst of economic headwinds.

The economic landscape in the fashion industry mirrors what’s happening on a larger scale, with many fashion companies opening up to acquisitions to navigate financial challenges. Companies like Capri, which sold Versace to Prada Group, and Dick’s Sporting Goods, which acquired Foot Locker, pursued deals to reduce debt, enter new markets, and scale their businesses. Simeon Siegel, a managing director at BMO Capital Markets, notes that players are taking advantage of value dislocation in the market.

The M&A space in the apparel industry is described as a splintered market, with businesses thriving on the sidelines and others seeking financial support through equity rounds or acquisitions. Investors are showing interest in M&A, despite cautious valuations due to concerns about consumer spending. While deals like the Skechers acquisition for $9.42 billion appear attractive, there is still uncertainty regarding enhanced valuations in the market.

Ultimately, the success of fashion M&A deals hinges on strong business fundamentals. Companies with low customer acquisition costs, high repeat purchase rates, and international reach are viewed as attractive targets for acquisitions. Brands like Dockers and Skechers, with significant international sales, demonstrate the importance of building a robust business foundation for M&A success.

Although not all M&A deals in the fashion sector have been successful, the industry continues to navigate challenges like regulatory approval and changing market dynamics. As the fashion M&A landscape evolves, companies are exploring opportunities to thrive in a competitive and volatile market environment.