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Some divestitures lay the groundwork for broader consolidation aimed at improving margins or fuelling innovation. “As the tectonic plates shift, companies feeling the earth shake shore themselves up by buying the weaker players and trying to outgrow the problem,” says Jan Rogers Kniffen, CEO of J Rogers Kniffen Worldwide. “It works — for a while.”
Even among financially healthy companies, the rationale for M&A is shifting. Cost control and category diversification are rising in importance. Partnerships and joint ventures — once rare in fashion — are gaining favour as companies embrace “asset-light” strategies. Authentic Brands Group has pioneered a licensing-led model that allows it to scale its portfolio while preserving liquidity — a strategy it is now applying to Dockers, which it agreed to acquire from Levi Strauss last month. Rather than operating its brands directly, Authentic relies on a network of licensees to extend global reach across categories and regions. This approach reduces overhead, accelerates market entry and gives the company flexibility to pursue additional deals. By pairing brand ownership with asset-light operations, Authentic positions itself as both a consolidator and an enabler in the evolving retail landscape.
The recent joint venture acquisition of heritage labels Badgley Mischka, Rachel Rachel Roy, C&C California and Kay Unger Design by Established Incorporated and ACI Licensing reflects a different strategy: pairing brand equity with licensing and distribution expertise. “In theory, this combination should inject new energy into the brands and accelerate their growth trajectory,” Saunders says.
What’s next: Scale, scarcity, or stalemate?
Looking ahead, analysts expect continued consolidation, especially among smaller and more distressed players. “We could see more consolidations to improve scale and spread overhead costs over more sales volume,” Kniffen predicts.
But the macro environment will shape the pace.
The Federal Trade Commission’s (FTC) decision last year to block Tapestry’s proposed merger with Capri underscores the complexities of consolidation in the luxury sector. In response, Tapestry agreed to sell Stuart Weitzman to Caleres, allowing it to concentrate on building Coach and Kate Spade — brands with stronger strategic and synergistic alignment.
Read More
Who could buy Versace from Capri?
Capri is reportedly gearing up to sell off Versace as well as Jimmy Choo. Vogue Business breaks down who could swoop in — and what it would mean for stablemate Michael Kors.
Meanwhile, the most storied luxury conglomerate continues to set the standard for M&A execution. LVMH’s patient, strategic integration of Tiffany & Co stands in contrast to the rushed deals common in mid-tier fashion. “LVMH takes years to fully understand what makes a new acquisition tick and how to integrate it,” Cohen says. “That process, while logical, is still the exception.”
At the same time, a different form of consolidation is taking shape within the luxury space. Deals like Saks’s acquisition of Neiman Marcus and Bergdorf Goodman signal a push towards vertical consolidation in luxury retail. “That move was clearly an attempt to get scale in luxury,” Kniffen says.
Fashion is at a crossroads. While the return of deal activity may suggest renewed confidence, its drivers are largely defensive. For many, M&A is a means of weathering turbulence, not transcending it.
As Cohen puts it: “Historically, retail mergers and acquisitions are more indicative of long-range decline than success.”
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
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