16 BDO LLP | RETAIL FORECASTS REPORT 2021
RETAIL TRADING CONDITIONS CONTINUED
TRANSACTIONAL ACTIVITY 2020 has been a year of change for all retail businesses. Almost overnight they had to adapt and change to a completely digital consumer. Whilst this was a trend we expected to happen in the short to medium term, this instant shift saw some real challenges for businesses but also a huge opportunity for some of the emerging brands in the market place. This in turn has resulted in an exceptional year of growth for some brands as the consumer has had more time to engage with brands via social media, previously unknown to them. As we move through quarter four, businesses are now considering how best to maximise the opportunity presented to them. Either by looking to partner to raise capital, in the case of GymShark, who is the
first consumer Unicorn (a privately-held company valued over $1bn, so-called on account of its mythical status) or exit to a strategic partner with global infrastructure such as Charlotte Tilbury and their exit to Puig. The market for Global M&A therefore remains buoyant even in these unusual times, with the larger retailers taking the opportunity to consider whether acquiring digital capability will allow acceleration of the changes they need to make as soon as possible. Equally, as the global consumer becomes embedded into digital platforms, retail brands need significant capital to invest into technology and the consumer experience to support the demands of the evolving consumer.
As we move forward into 2021, we expect similar hotspots for M&A globally in Beauty and Health &Wellness. However, efficacy in Beauty brands using innovation of science will be fundamental for the success of business in that space. In addition, one of the fast growing consumer areas of 2020 has to be the pet market. Significant interest and consolidation is expected in 2021 as the larger players look to secure new brands into their global operations. To date understandably consolidation has been the theme. In an environment of contraction, those with existing platforms and scale will succeed, as evidenced by the acquisition of DaveWhelan Sports by Frasers Group, in a competitive sales auction.
Made with FlippingBook HTML5