Fashion’s Most Anticipated M&A Hot Spots in 2025

Fashion dealmaking is back in full swing.

Lower interest rates and the prospect of a business-friendly Trump administration have unleashed a torrent of deals. While most have been small, it raises hopes that buyers will next set their sights on big start-ups and heritage brands long rumoured to be in the market.

Kapital, True Religion and Bonpoint are among the brands that have recently changed hands. More deals are almost certainly on the horizon, potentially including Versace, which owner Capri Holdings is reportedly shopping around after its own sale to rival Tapestry was blocked by the Biden administration. Among start-ups, intimates label Skims and activewear maker Vuori are at the front of the pack. Both have multi-billion-dollar valuations and have been waiting for the right moment to hold their initial public offerings.

When that moment will come is the big mystery. The improving environment for dealmaking is a double-edged sword; interest rates are ticking lower and valuations are ticking upward, but that means it often still makes sense for a brand to hold out for a better offer, unless its investors are pressuring for an immediate sale.

“I don’t want to be the guy to sell when there’s 4 percent interest rates. I’m going to be the guy that sells when there’s 1 percent interest rates.” said Sean Frank, chief executive of Ridge Wallets. The accessories brand is a tempting acquisition target: it generated $200 million in sales and $50 million in net profits last year, and has no outside investors.

“Still, if we get an offer for the right price, I’m down to sell it to somebody,” Frank added.

With the most desired brands holding out for a more favourable environment, investors expect the deals in 2025 will feature companies in need of a cash infusion to either reach a new level of growth or simply survive. There’s a potential for more public market brands to go private, a continued uptick in licensing firms acquiring distressed independent labels and consolidation among profitable start-ups that won’t wait for valuations to increase.

“It’s only a matter of time before would-be sellers don’t want to hold out any longer and they want to take their moment,” said Brent Vartan, managing partner at investment firm and creative agency Bullish, which backs early-stage brands like activewear label Bandit Running and skincare start-up Bubble.

The Business of Fashion breaks down the types of acquisition targets the industry will likely see this year and the unique stakes guiding their potential deals.

Public Market Buyouts

While the industry awaits the public market debuts of high-growth brands like Skims, Vuori and Shein, for a bevy of floundering public companies, this could be the year they’re taken private.

The next wave of buyouts for struggling firms is already underway. In December, the Nordstrom family enlisted Mexican retailer El Puerto de Liverpool to take their department store chain private. That activity could accelerate as a league of unprofitable companies with dwindling growth remains.

E-commerce brands and retailers that took advantage of the IPO boom in 2021, including sneaker maker Allbirds, scrubs provider Figs and resale marketplace ThredUp, have faltered in recent years, reporting consistent sales declines as they pursue cost cutting measures to narrow their losses. Allbirds, Figs and ThredUp’s stocks all sit more than 50 percent below their IPO prices, and their cash on hand have fallen more than 30 percent year over year. Allbirds narrowly escaped de-listing with a stock split last August.

Despite these brands’ reversed fortunes, there are buyers that think they can rightsize their businesses – or squeeze a bit of cash from them – outside the watchful eye of the public markets. In December, Figs received a takeover bid from private equity firm Story3 Capital Partners, according to a report in The Wall Street Journal.

Such deals have been happening off and on since the peak of the e-commerce boom around the start of the pandemic: South Korean e-commerce giant Coupang rescued Farfetch from near-bankruptcy in 2023, and in 2022 peer-to-peer reseller Poshmark was acquired by South Korean e-commerce firm Naver and online mattress seller Casper was bought by private equity firm Duration Capital Management in 2021.

More Heritage and Indie Brands Changing Hands

In the last month, a number of brand management and licensing firms have snapped up established brands that have seen better days, including Christian Lacroix and Laura Ashley. In December, British shirtmaker Thomas Pink was sold to brand management firm CP Brands Group and WHP Global acquired Vera Wang.

There’s likely more of those on the horizon. Michael Kors-owner Capri is reportedly looking to sell Jimmy Choo and Versace, which have seen sales decline but could experience a revival under the right owner, analysts say.

While buyers are showing a particularly strong interest in heritage labels with proven staying power, they’re also open to acquiring younger brands. London-based brand accelerator Tomorrow, which owns Coperni and Martine Rose, has started selling some of its labels, including menswear brand A-Cold-Wall, which it sold to distribution agency Four Marketing last November, and multi-brand retailer Machine-A to a private investor in China in December.

The stakes are particularly high for emerging lines following the shuttering of e-tailer Matches last March. Licensing firm The Brand Group rescued London-based womenswear maker Roksanda from bankruptcy last May. But more than a few cult labels have shuttered in the past year after failing to find buyers, including Y/Project in January and Australian label Dion Lee last August.

Buyers say they aren’t interested in acquiring money-losing brands just because they’re cheap. Many are looking for brands that can prove they have enough customer loyalty and fervor to outlast tough economic cycles, even if their businesses aren’t currently as strong as they once were.

“The ones that don’t have brand dilutions are the ones I take most seriously,” said Eli Yedid, chief executive of CP Brands Group. “You have to really be meaningful. Even if it’s distressed, I don’t think it’s an automatic buy.”

Midsize Brand Consolidation

While profitable start-ups that do more than $100 million in sales wait for big valuations, smaller-scale brands with between $50 million and $100 million in annual sales and less than $10 million in cash on hand could be an attractive target.

These start-ups want to invest in their growth but don’t have enough cash to fund expansion tactics like opening new stores or international distribution centres. Instead of raising venture capital and diluting their ownerships or getting acquired at a lower-than-desired valuation, investors say brands in this revenue range are looking to merge with similar-sized companies that have likeminded audiences but aren’t directly competitive.

For example, menswear label Mizzen + Main, known for its form-hugging, wrinkle-resistant dress shirts, is seeking to acquire a similar brand, according to a person familiar with the matter.

Last April, CFDA-award winning menswear label Billy Reid merged with digitally native men’s custom suitmaker Knot Standard to expand its retail footprint and increase its made-to-measure business. In this set-up, both companies combine operations to cut costs, improve margins and trade expertise. It also removes the question of valuations since the companies can exchange assets for equity without requiring cash.

“Deal structuring plays a really big role,” said Fan Bi, chief executive at e-commerce holding firm The Hedgehog Company. “If brands have realistic price expectations, they can still sell because instead of the buyer giving you cash, maybe they’ll give you stock of the combined entity.”