Last week at the Headquarters of the FashionClub70 in Antwerp, our colleagues at Oaklins KBC Securities held their second Board of Inspiration. FashionClub70 is one of the most renowned fashion distributors in Europe, representing more than 70 high end brands to more than 1,700 boutiques over the entire Benelux area. A perfect location to discuss the future of fashion and retail with investors, fashion labels and designers, retailers and distributors.
For our Board of Inspiration, we always choose topics which are top of mind for our clients. Together with the expertise of Oaklins, we were able to host a colourful evening on the future trends in fashion and retail, interesting for all players in the sector.Frederik Vandepitte, Principal, Oaklins, Belgium
The evening, hosted by Tom Simonts, Senior Financial Economist at KBC Group, started off with a presentation on the hottest topics in the fashion industry by Federico Giammarusto and Sergio Pea, both partner at Oaklins Italy and fashion experts. The duo has an extensive track record in mergers and acquisitions throughout the fashion and retail sector.
Federico Giammarusto describes the business of fashion as fast-changing and disruptive. Not only does e-commerce jeopardise retail business, there is a large generational shift. Social media enables challenger brands to reach the market at a fast pace where incumbent players have rested on their laurels. The pressure towards more and more socially responsible fashion is one of the most underestimated trends at the time.
Contemporary fashion has invaded the global market. We are expecting a return to the basics of design and tradition. This could drive a further wave of M&A. Accessible fashion has put a lot of pressure on the market, and there’s a size limit on the expansion of entrepreneurial companies. M&A could be the only way to enlarge a business.FEDERICO GIAMMARUSTO, OAKLINS CONTEMPORARY & ACCESSIBLE FASHION SPECIALIST
Sergio Pea explains: “There are different ways to look at fashion business and investments. Brands can be divided into three big groups: we have known brands that have to be relaunched and are in need of an enormous Capex on management, communication and sales channels. Then there are companies with very limited international presence where it's too difficult to convince the owner to adapt to a completely different business structure. Finally, there are, what we call, hypergrowth companies. They have an immense potential but at a great cost. It is always important to find the right balance between scale and cost.”
Matthieu Develey, Investment director at the London-based independent Private Equity fund, Bluegem agrees that fashion and retail remain busy sectors for private equity but adds that there is not one magic key to success. However, over the years, he could identify some clear landmarks and misses: “Appealing brands with a strong heritage, a unique and superior product and a loyal and diverse consumer base including an innovative, future proof retail concept are often the most successful to invest in,” he states.
But how do fashion brands and designers themselves approach the trends in fashion and retail nowadays?
During a lively conversation with Peter Perquy, CEO of the Belgian fashion brand, Terre Bleu and Nicolas Lavigna, co-founder of Norm shoes, agreed upon the trends mentioned by the previous speakers. Peter Perquy: “The main difficulty for us is to predict our consumers. To remain relevant, we need to be ahead of what the consumer wants in a year or even two years, not tomorrow. Therefore, you need a perfect team.”
As a starting shoe brand, Norm shoes focuses on transparency and sustainability. “We focus on a hybrid model, a concept store and website. These will remain our main operational and financial challenges, for the coming years.” Peter Perquy adds: “Internet and social media are crucial. Although we prefer to use different channels, we need to be very wary of channel conflicts. E-commerce is a large opportunity, but it is also a risk since it takes money.”
Finding investment money is a challenge for both companies. “As an established brand it is difficult to change the investor’s perception of what the brand used to be. You have to invest a lot to reposition an old fashion icon into a new dynamic brand and to convince the investor”, says Peter Perquy. Norm raised in a first period €60,000 by crowdfunding just to start the brand but is now facing the challenge of needing new investments to further develop their brand.” According to Peter Perquy who has quite some experience in acquisitions, the key pitfall in M&A is to successfully integrate different companies. It is very difficult to make people think in the same way and make them march into the same direction together.”
The evening ended with an exquisite walking dinner by chef Julien Limbach and a networking occasion for the selected invitees. Oaklins and their local colleagues at KBC Securities can build further on this successful formula and work towards the third edition of Board of Inspiration in the first quarter of 2020. Stay tuned for the next edition!
Talk to our industry specialists
Oaklins is a global advisory firm providing M&A, growth equity and ECM, debt advisory and corporate finance advisory services. With dedicated experts covering 15 industries in 40 countries, we leverage our on-the-ground presence to deliver the unparalleled service you deserve. Our track record of over 1,500 closed deals in the past five years shows that we obtain results every step of the way.
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