Alexandra Soto in Women's Wear Daily
On October 24, Alexandra Soto, Chief Operating Officer of Lazard, was featured in Women's Wear Daily, analyzing the current status of fashion deal-making and M&A around the world.
Alongside a select group of investment bankers with a specialization in the fashion sector, Alexandra was asked to share her insights into a seemingly simple question: Will the deal market keep heating up in fashion, and if so, why?
"It is a real paradox. The fashion industry’s M&A environment is experiencing numerous conflicting trends, with certain factors promoting deal activity and others hindering it, leading to significant polarization of interest," Alexandra explained.
"Recent examples of M&A activity in the fashion industry underscore how strategic players, faced with financial challenges and shareholder pressure, have been compelled to reevaluate their brand and category portfolios, as well as their overall strategies," she continued. "The consolidation trend in this sector began long ago, as large groups built portfolios of fashion and luxury brands to benefit from scale, making it increasingly difficult for independent brands to compete, both digitally and physically with the in-store experience."
Alexandra also shared her perspective on the drivers propelling the unexpected increase in fashion deal activity throughout 2023.
"This year, new dynamics have emerged impacting M&A valuation: The impact of inflation on margins, underperformance of some online and physical retailers prompting questions about the optimal distribution mix, softening demand in China, de-globalization of the supply chain, among others. With these new challenges come new needs, and recent deal activity demonstrates that the group concept allows for greater agility in responding to a rapidly changing environment," Alexandra concluded.