April 6, 2018
Business changes–that's the nature of the beast. But this year, businesses are snapping up competing or complementary companies left and right, in deals that will surely have impact for years to come.
Amanda Cioletti, executive editor,
The apex of this, of course, is Amazon's June purchase of upscale grocer Whole Foods, valued at $13.7 billion–a coup for the world's No. 1 retailer and a true shake up in the world of food retailing, sure to disrupt the business on every level.
But this spring and summer has seen many, many other retailers, brands and licensees join forces to combat a changing marketplace and consumer landscape.
On the heels of Amazon's mammoth buy was the less splashy deal, but a headline none-the-less: Walmart's acquisition of men's clothing company Bonobos, which has a strong, organically built e-tailing and shop-in-shop component. Walmart snapped up the 10-year-old Internet brand for $310 million in cash.
The buy was a strategic move for Walmart in its bid to keep pace with Amazon, and follows its other e-tail purchase, ModCloth, in March. Walmart acquired the assets and operations of ModCloth,
Both the ModCloth and Bonobos purchases are intended to fuel Walmart'sJet.com
business, the mega-retailer's answer to Amazon, which it acquired in 2016.
More recently in July, QVC took full ownership of mobile and e-commerce retailer HSN, in a bid to bring together the two largest TV-based retailers in the U.S. The deal is valued at $2.1 billion.
But it's not just retailers who are consolidating. Brands are getting in on the action too.
On July 25, Michael Kors Holdings announced its purchase of luxury footwear brand Jimmy Choo for $1.2 billion. The buy is intended to shore up Michael Kors' flagging core brand sales, as well as open up new categories and markets for Jimmy Choo. This type of deal is becoming commonplace among luxury fashion brands as others have been consolidating left and right this year, including Coach, which purchased Kate Spade in May for $2.4 billion, and LVMH Moët Hennessy Louis Vuitton's April buy of Christian Dior for a staggering $13.1 billion.
Also in July, Cirque du Soleil, which is an entertainment company backed by private equity, set its sights on Blue Man Productions, a fellow live entertainment organization famed for its Blue Man Group. The purchase further widens Cirque du Soleil's global portfolio and diversifies its brand beyond its core circus-esque performances.
On the entertainment front, Discovery Communications announced its acquisition of Scripps Networks for $14.6 billion on July 31. The purchase will add Scripps' channels such as HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and more to Discovery's portfolio, which already includes the flagship Discovery Channel brand as well as TLC, ID, Animal Planet and OWN, among others.
Licensees and brand management companies are also hot on the trend, with moves that are both surprising and practical.
In June, brand management company Marquee Brands, in a co-deal with one of the world's largest licensees, Global Brands Group, purchased fashion house BCBG Max Azria Group. Read more about this deal in our cover story "Marquee Brands Focuses on High-End Brands".
Well-established licensee Mad Engine took over the Neff Headwear business in May from Marlin Equity Partners. The move brings Neff founder Shawn Neff into Mad Engine's C-suite, further diversifying the company's business portfolio.
Similarly in May, Funko agreed to acquire California-based Loungefly, a fashion accessories company, for undisclosed terms. The deal will continue to transition Funko's booming collectibles and novelties business into fashion and adjacent categories.
Meanwhile, in March, Delta Apparel sold off the vintage-inspired, licensed t-shirt business Junk Food Clothing to JMJD Ventures for $28 million. Delta bought Junk Food in 2005, but offloaded the business to "reduce our reliance on licensed properties" and lower its debt levels, says Robert W. Humphreys, chief executive officer, Delta Apparel.
And Rubie's Costume Co., a leading costume and dress-up manufacturer, in an effort to strengthen its business from end-to-end, purchased BuySeasons, a fulfillment company.
I'm sure there are many other deals absent from this list, but the message is clear: while retail may be shifting and evolving, and companies consolidating and changing hands, business is still business and it is growing, albeit in new (and sometimes perplexing) ways. The companies that band together and join forces to bolster expertise are positioning themselves well for longevity. And at the end of the day, that's what we want, right? Stuff to buy and a place to buy it.
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