Industry Q&A – Factors Fueling Surge in Retail Sector M&A
by CEO Marc Cooper
I recently spoke with the Head of our Consumer Retail David Shiffman about the phenomenal amount of Mergers & Acquisitions activity in the sector since 2024 and factors contributing to continued momentum.
David, tell us about recent retail M&A activity and what your expectations are for Q2 and beyond.
Marc there’s been a major uptick in dealmaking activity that we haven’t seen in ages.
Despite the uncertainty created by the change in administration in the US, market swings, and borrowing costs, M&A in the retail sector is booming. We think it will continue to be a key strategy for companies looking to enhance their competitive positioning. The ongoing activity over the last few months is an extremely positive indicator for continued dealmaking in the second quarter and the remainder of 2025.
Can you share some recent notable deals?
Marc, as you know, Solomon was busy throughout 2024 and continued into 2025. We advised Saks Global on its $2.7 billion acquisition of Neiman Marcus Group, Chicos on its $1 billion sale to Sycamore, and Hibbett on its $1.1 billion sale to JD Sport. Early in 2025 we sold VERA WANG to WHP Global and assisted Steve Madden in a cross border acquisition and financing of Kurt Geiger from Cinven.
Other pending deals in 2025 include Prada purchasing Versace from Capri Holdings for ~ $1.4 billion, Caleres buying Stuart Weitzman from Tapestry for ~$105 million, Kontoor Brands purchasing Helly Hansen from Canadian Tire for ~$900 million, and Brigade buying Family Dollar from Dollar Tree in a $1 billion-plus transaction.
In addition, Sycamore Partners entered into a definitive agreement to acquire Walgreens in a take-private transaction valued around $10 billion; Lands’ End’s largest shareholder Edward Lampert is exploring a strategic sale; and Solomon is advising the Special Committee of Guess?, Inc, on the going-private proposal it received from WHP Global.
That’s quite a list! There seems to be an increase in deals involving intellectual property acquisitions. Can you discuss the strategy behind brands bifurcating their operations and intellectual property assets and selling off their intellectual property?
Absolutely, Marc. We recently wrote an article examining the evolution of brand management companies in the retail industry and the strategy behind these businesses. This trend is one of major forces fueling M&A in the retail sector right now, and Solomon is advising many companies on these types of transactions.
The concept of brand management companies, or IPCos, is not new, but it has evolved significantly. Initially popularized by Christian Dior in the 1940s, brand licensing allowed companies to expand their influence globally without directly managing production or distribution, while earning royalties in return. In the 1990s, this spawned retail brand management companies, which scaled through aggressive acquisitions and licensing agreements.
How are IPCos and OpCos working together in today’s retail landscape?
IPCos focus on maintaining and growing brand equity while generating steady royalties through licensing deals. They split intellectual property from operations, allowing OpCos to handle the heavy lifting of design, production, and distribution. This asset-light model reduces operational risk and enables IPCos to scale effectively.
What challenges did first-generation IPCos face?
The early IPCos struggled with public market pressures, leveraged capital structures, and over-reliance on a small number of key retail partners. Many faced bankruptcy or were sold to competitors due to lack of diversification and debt burdens.
How has the IPCo model transformed in recent years?
The IPCo model has shifted to private ownership. Today key players like Authentic Brands Group (ABG) and WHP Global dominate the space. These companies have diversified portfolios spanning various market segments, which help mitigate risk and capitalize on consumer trends. Both are backed by leading private equity firms and financed by multiple lenders, including large banks and private credit.
What opportunities lie ahead for IPCos and OpCos?
Significant creativity in dealmaking is driving the industry forward. Joint ventures like ABG’s newly formed Catalyst Brands and WHP’s Phoenix are expanding retail and brand management footprints. The brand management and licensing industry is poised for meaningful activity, with OpCos playing critical roles behind the scenes. We expect to see more deals of this variety. For example, several brand management companies are vying to buy Dockers from Levi Strauss & Co.
Learn more about evolution of brand management companies in my latest article.
