Market Debrief

2021 Market Shifts, in a Nutshell.

Key Takeaways

  1. The pandemic hit smaller brands most, making them more susceptible to being bought out by major, global fashion companies.
  2. Gucci’s parent company, Kering, has made significant acquisitions over the last year. This, coupled with their growth over the last decade, makes them one of the most scalable fashion companies on the market today.
  3. From diversifying their offerings to supporting innovative startups with fresh value propositions, the fashion world right now is continually on the move. Over the next year, we'll likely see further investments in brands with technological and sustainable innovations.

2020 was a year where deals were put on hold, sales fell dramatically, and major fashion brands experienced unwelcome turmoil. So it’s no surprise this created a landscape where mergers and acquisitions transformed the world of fashion. The pandemic hit smaller brands most, making them more susceptible to being bought out by major, global fashion companies. The climate for mergers and acquisitions is only improved by historically low borrowing costs that benefit influential brands willing to invest——at 1MOQ, we’ve discussed this topic in depth.

With all that said, we’re highlighting some of the most significant market shifts of the year:

LVMH Acquires Significant Stakes in Off-White LLC
French luxury goods company LVMH Moët Hennessy Louis Vuitton has been in the public eye for some time now with its major mergers and acquisitions. The brand first closed a deal with US jewelry brand Tiffany in the final quarter of 2020 for a total of $15.8 billion. 

But this wasn’t LVMH’s final acquisition within this short period. The luxury conglomerate has further strengthened its relationship with designer Virgil Abloh by purchasing a majority stake in Abloh’s Off-White brand. Contributing to the deal with the designer, LVMH now owns 60% of the trademark and aims to support Off-White’s growth. However, the 40-year old designer Virgil Abloh remains the artistic director of Louis Vuitton's menswear collection. With this deepened partnership, we can look forward to Abloh’s influence on a broader range of luxury categories.

In the same month, LVMH also took a minority stake in Phoebe Philo, supporting the designer's own soon-to-launch label. Just one month prior, in June 2021, LVMH also fully acquired Italian fashion house Pucci. The group had previously purchased a 67% ownership of Pucci and has invested the outstanding amount for a complete acquisition.

Kering's Growth
Gucci’s parent company, Kering, has also made significant acquisitions over the last year. This, coupled with their growth over the last decade, makes them one of the most scalable fashion companies on the market today. In June 2021, Kering took a stake in luxury rental company Cocoon. The stake is currently undisclosed. Cocoon is a London-based startup that focuses on renting luxury handbags, including Gucci, Balenciaga, and Bottega Veneta. The deal is part of Kering’s strategy to invest in a range of innovative startups.

Richemont Acquires Delvaux
Also, in June 2021, luxury brand Richemont, famously known for its jewelry and watches, acquired 100% stakes in Belgian luxury leather goods brand Delvaux. The transaction was private and might mark Richemont’s intentions to branch out into a broader range of luxury products. Delvaux is one of the world's oldest luxury leather goods brands, with its founding dating back to 1829. Under the new management of Richemont, Delvaux hopes to reach its full potential.

Nordstrom Purchases Stakes in ASOS Brands
This summer, Nordstrom branched out into younger audiences by purchasing minority stakes across four ASOS brands, including Topshop, Topman, Miss Selfridge, and activewear brand HIIT. Nordstrom partnered with Topshop and Topman before the brands kickstarted bankruptcy proceedings in late 2020. British online retailer ASOS acquired these brands from the Arcadia Group in 2021, leaving Nordstrom the only US distributor of Topshop and Topman. The acquisition may pave the way for a deeper partnership between the two retailers, with Nordstrom targeting younger customers. The initial outline plans to make ASOS eCommerce orders available for collection in Nordstrom stores starting from fall 2021. 

A Paradigm of Change to Continue in 2021
With favorable conditions for acquisitions and mergers, 2021 has highlighted the desire of major fashion brands to expand their audience and win younger customers. From diversifying their offerings to supporting innovative startups with fresh value propositions, the fashion world right now is continually on the move. Over the next year, we'll likely see further investments in brands with technological and sustainable innovations. We may also see private investors from both the Middle East and China move in on smaller, contemporary fashion brands that resonate with younger customers. Watch this space!