Get ready for another dealmaking rush, with acquisitions and IPOs both picking up momentum heading into the fall.
Dealmakers certainly came out in force this summer.
Tapestry Inc. took the spotlight with an $8.5 billion deal to buy Capri Holdings. But there were other big movers. Kering agreed to buy high-end fragrance house Creed in a transaction said to be valued at 3.5 billion euros, and also cut a deal to acquire 30 percent of Valentino for 1.7 billion euros. Compagnie Financière Richemont picked up a controlling stake in Gianvito Rossi. Also making a connection was Ariela & Associates International, which bought the buzzy direct-to-consumer intimates brand Parade.
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Experts see more deals ahead as the competitive landscape resets.
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Investors looking for an exit are also seeing opportunity again in the market for public offerings.
While 2021 was a banner year for industry IPOs — from Allbirds to Olaplex to Mytheresa — the market’s enthusiasm for its new darlings waned quickly as the pandemic-era e-commerce growth tapered off and consumers pulled back.
Now the floodgates are starting to open back up.
For-profit thrift store Savers Value Village and L Catterton-backed beauty company Oddity Tech both staged successful offerings over the summer.
These whet the appetite just enough for bigger players to make their move.
Birkenstock, also backed by L Catterton, is said to be prepping for an offering as soon as next month that could value the German sandal maker at $8 billion-plus. Kim Kardashian’s Skims just raised money at a $4 billion valuation, laying the groundwork for a potential IPO over the next year.
Fast-fashion giant Shein is also seen as making its move sometime over the next year or so, but is facing a tangle of controversy — from the use of a trade loophole to ship goods to eco and labor concerns.
Given the mechanics of the market and the need for road shows to pitch new entrants to investors, the action is expected to come between Labor Day and Thanksgiving.
Just how it goes will shape the market headed into 2024.
Seth Farbman — who is chairman and cofounder of VStock Transfer and gets to see a lot of the action as his company traffics stock in new offerings — said while the market is picking back up, 2023 is not 2021.
“We’re just in an entirely different environment,” Farbman said. “In those days, everybody was doing deals, everyone was going public, everyone was getting money thrown at them. Today we’re seeing, on the investment banking side, the bankers are far more selective. They want only the cream of the crop. On the issuer side, the CEOs are frankly being more selective as well.”
Birkenstock has become a kind of a bellwether. If the company does go public with big stock gains it can hold on to, more players are going to jump into the market.
Birkenstock and Skims are both in something of a sweet spot for the market.
In IPOs, companies first sell the stock to institutional investors, who in turn sell the shares into the open market. At the beginning it’s a process between professionals, but eventually more individual investors get into the game — and that’s where name recognition can really help.
“Anything that people can invest in that they can relate to on a consumer level is showing itself as a very hot property,” Farbman said.
“You could have companies that have strong institutional backing at the onset and then the company goes public and then the story fizzles out because they don’t have this secondary market of interest,” he said.
Sustaining interest shouldn’t be a problem for the big new entrants on the horizon.
Birkenstock has been making shoes since 1774 and Skims has Kim Kardashian.
Everyone else who has been quietly prepping for their own introduction to Wall Street — or contemplating some other kind of deal — is going to have to make their own case to investors.