Increased M&A activity in the Australian fashion retail space is set to continue this year, with a “doubling” of brands up for sale according to industry investors.
Thrills, Honey Birdette, General Pants, Brand Collective and Culture Kings are some of the notable fashion brands acquired in recent years.
Speaking at Ragtrader Live Sydney, Alquemie Group executive chairman Richard Facioni said the post-pandemic trading period has seen a doubling of brands on the market.
“People may have wanted to sell but couldn’t over that period," he said. "Now that businesses are actually benefiting post-COVID, they’re looking good on an annual cost basis and moving to monetise that.”
Alquemie Group, which acquired General Pants last year and has a number of international brand licensing agreements, is currently considering further acquisitions. These include brands in the homeware and childrenswear categories.
Hotsprings CEO Wassim Gazal said unique brand propositions, people and scalability are key factors when acquiring or investing in businesses. Hotsprings has a number of successful fashion labels in its portfolio, including P.E. Nation and Rebecca Vallance.
Gazal said that working in the domestic market of Australia, it is possible to forget how small it is. Australia's population of 25 million is equivalent to 0.33% of the total world population, according to Worldometer. Rebecca Vallance currently credits up to 80% of apparel sales to the international market.
“Ideally, you want a brand that can be international," Gazal said. “Any brand that has a unique proposition needs to have the ability to scale domestically and internationally and has to have a multi-dimensional online and bricks-and-mortar offering.
"And then the people must have passion in the game.”