Takeovers and mergers in the UK retail sector climbed 8.1% in the last year (from 36 to 40), the highest number since before Covid, with childrenswear and premium brands key targets, according to research from accountants/business advisors Lubbock Fine.
Belstaff
Clothing was the subsector that saw the most deals at 10, up from six the previous year, “due to demand for childrenswear and overseas buyers luxury and fashion groups looking to make strategic purchases of UK assets”.
It said notable deals included global school uniforms group Hancock & Gore taking over UK operator Schoolblazer, while H&G’s Manchester-based rival Parently snapped up Term Footwear, which specialises in children shoes.
On the premium front, it noted British outerwear designer and retailer Belstaff was bought by Castore’s parent J Carter, outdoor specialist Karrimor was sold to Japanese groups Itochu and Adastri, “who intend to expand the brand into Asia”, and high-end streetwear brand End was taken over by private equity group Apollo.
Other notable deals in the clothing/footwear sector included the sale of Kurt Geiger to US footwear group Steve Madden and Laura Ashley, sold by Gordon Brothers to Marquee Brands, the owner of Ben Sherman, the report highlighted.
It also pointed to tough economic conditions, as well as high rents, behind the sale of Poundland to turnaround specialist Gordon Brothers by PepCo for £1 in June.
Lubbock Fine M&A partner Rahid Rashid said: “What we’re seeing is an increase in retail deals, but what is noticeable is that it is corporate buyers [that] have been particularly active undertaking strategic deals.
“It is noticeable that many of these deals have been in sectors where consumers would be reluctant to cut spending in a weak economy – for example childrenswear.”
Rashid also noted that if interest rates continue to fall and reduce the cost of deal finance “that should increase M&A activity from both corporate buyers and private equity.”
