Mergers and acquisitions continue to garner headlines amid enduring consolidation in the fashion, luxury, sportswear, and beauty segments, as well as in the resale and web3 realms. Key deals have seen LVMH add Tiffany & Co. to its lineup of brands, bolstering its position in the hard luxury space; Nike purchase digitally-native brand RTFKT, as companies place their bets on the burgeoning virtual world; and Farfetch nab a 47.5 percent stake in Yoox Net-a-Porter in what is expected to the first leg of a larger transaction. At the same time, other acquisitions are proving to be integral to the operations of fashion and luxury industry entities – those that see big brands amass stakes in their critical suppliers (or acquire those companies outright) in an effort to exert increased control over the manufacturing of their offerings and shore up their supply chains to ensure closer ties to sources of raw materials and valuable know-how.
Not a new trend, luxury goods brands – from watch companies to wine makers – have been busy acquiring their suppliers in recent years in order to future-proof their own businesses (and potentially shut out rivals that may share the same supplier; it is not uncommon for suppliers to serve multiple brands at the same time). Nonetheless, vertical integration activities appear to have been accelerated by the impact of COVID-19, which has required companies to “shift to e-commerce sales channel and [engage in] supply chain reorganization and monitoring,” things that Deloitte points to as among the “main new strategies adopted by companies” in the wake of the pandemic.
In order to key a close eye on the development of trends in this space, we have compiled a (running) timeline of supply-focused investments and M&A events to provide a broad overview of which players are raising funds, which are merging, and how the trajectory of this segment of the market evolves over time.
May 25, 2023 – Permira Takes Majority Stake in Gruppo Florence
Permira has acquired a majority stake in Gruppo Florence in a deal that reportedly values the hub of Italian luxury clothing and leather goods manufacturers at more than 1 billion euros ($1.1 billion). “With revenues of more than 600 million euros in 2022, Florence groups 26 companies which it acquired over time from owners who reinvested part of the proceeds from the sale of their businesses into the hub,” per Reuters, which reported that Gruppo Florence founder VAM Investments “will reinvest part of the proceeds of the sale into the group, keeping a significant stake.” (Gruppo Florence was founded in 2020 by VAM Investments, the Milan-headquartered private equity firm controlled by former Bulgari Chief Executive Francesco Trapani, who will stay on as the group’s chairman.) Fondo Italiano d’Investimento, a fund controlled by state investor CDP Equity, will also retain a minority holding in Gruppo Florence, while investment holding Italmobiliare will liquidate its stake with a 78 million euro gain.
May 4, 2023 – OTB Acquires Majority Stake in Leather Goods Supplier
Only The Brave, S.p.A., the Italian fashion group that owns Diesel, Maison Margiela, Marni, Jil Sander, and Viktor & Rolf has acquired a majority stake in Frassineti, long-term leather goods supplier of the Jil Sander brand. The Renzo Rosso-led group said the deal will enable it to ensure stability in its supply chain and to accelerate growth of Florence-based company. The terms of the deal have not been disclosed beyond that fact that the Frassineti family will retain a minority stake in the company.
Apr. 13, 2023 – LVMH Takes Controlling Stake in Platinum Invest Group
LVMH has entered into an agreement with Andera Partners, Bpifrance, and other shareholders to acquire a majority stake in Platinum Invest Group. The deal is slated to give LVMH control of France-based jewelry producers, Orest and Abysse, and enable Tiffany & Co., which the French conglomerate acquired in January 2021, “to strengthen its production capacities in the region and support [its] strong growth in fine and high jewelry manufacturing.” The terms of the deal have not been disclosed.
In a statement, Tiffany & Co. CEO Anthony Ledru said: “We are delighted to be able to welcome Orest and Abysse into the Tiffany & Co family. This acquisition is an important step for our House; it will allow us to reinforce our commitment to the highest level of quality, while expanding our production capacity to meet the growing demand of our clients.” President of Orest and Abysse, Denis De Becker, added: “After years of fruitful collaboration, we are very proud to join the LVMH Group and strengthen our ties with such an iconic house as Tiffany & Co. and, thus, be able to contribute to its growth and development.”
Mar. 29, 2023 – B2B Supply Chain Marketplace Fashinza Raises $30M
Fashinza has raised $30 million in a new round led by Mars Growth Capital and Liquidity Group. The Gurgaon, India-based company – which touts itself as an AI-powered B2B supply chain “marketplace” for fashion brands and retailers – will use the new cash to further its ongoing expansion into the U.S., Gulf region, and Europe. “Fashinza is transforming the global fashion supply chain. Their performance since inception, the strength of their founding team, and their existing global network of manufacturers and customers gave us enough confidence in their ability to scale this business and sustain in the medium to long-term,” Navas Ebin, Managing Director of APAC for Mars Growth Capital and Liquidity Group, said in connection with the round.
Mar 28, 2023 – Burberry to Acquire Arm of Outwear Supplier for €21M
Burberry has entered into an agreement to acquire a business from longstanding Italian supplier, Pattern SpA, for 21 million euros ($22.83 million). In a statement, Burberry revealed that it has partnered with Pattern for almost two decades to produce luxury ready-to-wear including quilts and downs at the Italian company’s product development site in Turin, Italy. “With this investment, Burberry will secure capacity, build technical outerwear capability and further embed sustainability into its value chain,” the company said, confirming that “approximately 70 of Pattern’s employees in Turin will join Burberry on completion of the acquisition, expected later this year, [and] Pattern will continue to operate the parts of the business not included in the transaction.” As part of the deal, Burberry will not only hire 70 employees from its supplier but also acquire relevant equipment and inventory.
Mar. 14, 2023 – Kering to Acquire Eyewear Manufacturer UNT
Kering Eyewear has signed an agreement to acquire 100 percent of the share capital of “long-term, high-quality supplier [and] business partner” UNT, Usinage & Nouvelles Technologies in order “to strengthen its position in the luxury eyewear industry.” In a release, Kering revealed that “this transaction represents another important step in the industrial development strategy of Kering Eyewear, which controls its supply chain through strategic partnerships with industry-leading manufacturers.” It further asserted that the deal “represents the opportunity to create an integrated luxury eyewear platform with best-in-class manufacturing capabilities, facilities and talents.”
The terms of the deal have not been disclosed, but Kering confirmed that the transaction is subject to the clearance by the relevant competition authorities and is expected to be completed in the second quarter of 2023.
This is a short (and incomplete) excerpt from a data set that is published exclusively for TFL Enterprise subscribers. For access to our up-to-date supply chain investments and M&A tracker, inquire today about how to sign up for an Enterprise subscription.