Fashion & Luxury Private Equity and Investors Survey 2017

Overview

In 2016 several global economic and geopolitical trends had a big impact on the Fashion & Luxury (F&L) industry. Rising commodity prices, trade stagnation, new monetary policies and their influence on exchange rate dynamics, financial stimulus measures in major economies and continuous digitalization have been the main factors influencing business models in the industry. Key players are now ready to divest and reorganize their underperforming and peripheral brands, diversifying their business models in order to boost or at least sustain profits. Against this background, global investors interested in the Fashion & Luxury industry are reviewing their future expectations and strategies.

The second edition of the Global Fashion & Luxury Private Equity and Investors Survey, developed by the member firms of Deloitte’s EMEA Region, analyzes market trends and expectations of M&A activities in the fashion and luxury sector. This report is provided as a complement to Deloitte’s Global Powers of Luxury Goods annual report.

Key findings from the report include:

• Apparel & Accessories and Watches & Jewelry are the most attractive sectors for F&L investors with strong turnover growth, profitability and increasing M&A activity.
• The analysis of top F&L Groups’ economics shows that industry turnover is 1.7 times the value it was in 2010 (at constant exchange rates), with Personal Luxury Goods (PLG) decelerating in the last three years and Experiential Luxury maintaining their growth rates.
• The F&L industry proved to be fertile soil for M&A activities with 211 deals registered in 2016, an increase of 70 deals compared to the previous year. Of the M&A deals completed, 68% were carried out by strategic investors, an increase of 73 deals compared to 2015.
• Within the next three years, investors forecast that the F&L industry will continue to grow by 5-10% annually.
• In 2017, 90% of funds are considering investing in an F&L asset, with notable interest rising in Apparel & Accessories (where 68% intend to invest), and Cosmetics & Fragrances (49%).
• Digital Luxury and Cosmetics & Fragrances are expected to strongly outperform the market average, growing by more than 10%.