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UK Retail M&A Volume / Value
A 58% increase in annual retail M&A deal volumes last year suggests the retail sector is starting to find opportunity in transactions after the brutal impact of the cost-of-living crisis.
However, while investor confidence in the UK high street is returning, it’s smaller deals which are pushing up the numbers.
Retail is at the mercy of inflation and interest rates. These finally started to moved in the right direction in the second half of 2024 and are expected to continue to do so.
In January, Goldman Sachs argued that UK markets are pricing in too few rate cuts and suggested that the Bank of England could reduce interest as many as six times by the middle of 2026.
Meanwhile, data from the British Retail Consortium’s December Consumer Sentiment Monitor shows that personal financial situations are slowly improving.
But the new year also brings challenges: input costs are still higher than four years ago, and the sector is heavily exposed to April’s increases in employer National Insurance Contributions (NICs) and the National Minimum Wage (NMW).
UK retail M&A volumes in H2 2024 compared to H1
We advised Japanese lingerie manufacturer Wacoal on its acquisition of UK plus-sized bra specialist Bravissimo in September 2024.
Wacoal will accelerate Bravissimo’s overseas presence by strengthening its e-commerce business and expanding its fitting service. The two businesses will benefit from synergies in lingerie design, manufacture, distribution, and retail.
Bravissimo was founded in 1995 to cater for a gap in the market for D-K cup bras. Its store layout redefined lingerie shopping by dedicating floor space to personalised fitting rooms, and stock areas to hold the hundreds of different sizes and colours required in lingerie retail.
Today, it has 26 stores in the UK, one outlet in the US, and an online presence.
We offered full buy-side support for the deal across SPA advisory and transaction services, including financial, tax, cyber, and IT due diligence.
South African retail group Foschini (TFG) bought White Stuff in October 2024. TFG’s stable of UK high-street fashion brands includes Hobbs, Phase Eight, and Whistles.
The deal marks an exit for White Stuff’s founders, who started the business in 1985, selling T-shirts from a suitcase.
Today, White Stuff has 113 stores and 46 concessions in the UK, as well as an online business, and European outlets.
There were two deals involving online florists in November 2024. They follow in the footsteps of Freddie’s Flowers and Bloom & Wild, both of which received private equity investment in 2021.
In November 2024, Manchester-based Apparel Brands Limited (ABL) which includes Bench, Seafolly and Ed Hardy, acquired kids and streetwear brand Hype. . Private equity house True invested in ABL in 2023.
EV/EBITDA
Public market EV/EBITDA valuations set the tone for private M&A deal values by reflecting broader market sentiment and sector trends.
Multiples fell from low double-digits in 2021 to mid-single digits, where they’ve been hovering since Q1 2023.
This is reflected in some of the private pricings we’ve seen in H2 2024.
Though not included in our stats (which concentrate on acquisitions of UK assets), 17 UK retailers bought overseas entities in 2024.
Frasers continued its global expansion strategy, buying companies in Norway, South Africa, Australia, and the Netherlands.
Dunelm and WH Smith Group both bought Irish assets. Meanwhile, Wourth Group (owner of Hotter Shoes and WoolOvers) bought an undisclosed stake in German fashion mail order company Peter Hahn, which targets women over 45 years old.
Philip Stephenson, Head of Consumer for Restructuring
“There were 10 transactions involving restructuring processes across 2024, compared to nine in 2023.
The second half of the year saw some high-profile rescue deals from companies suffering from depressed trading activity, depleted reserves, reduced consumer confidence, and operating model challenges:
Restructuring plans continue to be an increasingly popular tool to give companies and creditors a formal arrangement to navigate financial difficulty. They include the ability to compromise certain creditors if they don’t approve the plan.
During 2024, both SuperDry (C-Retail Limited) and Dobbies Garden Centre used them. In June, Superdry founder Julian Dunkerton underwrote a £10 million rescue plan to save the 700-plus store multichannel fashion business, which eventually delisted.
In December, Dobbies’ restructuring plan was approved, meaning the company will shut 12 stores.
We’re already aware of a number of retailers seeking advice in relation to their options and expect to see an increase in the use of restructuring plans in 2025.
Retailers are combatting rising staff and operational costs with digital transformation. Our TMT Winter 2024-2025 M&A Insight reveals how deals involving retail software have rocketed since the pandemic.
What was TMT M&A activity like in 2025? Stay informed on the key trends and deals with our latest sector review.
Ultimately, retail M&A is inextricably tied to economic fluctuations. We expect falling interest rates to be the biggest driver in bringing investors to the table this year. Low rates are good news for consumer finances and also mean cheaper debt to oil the M&A machine.
The significant increase in 2024 retail transactions is a sign of investors dipping their toe in the water while consumer confidence slowly returns. As 2025 progresses, we expect others to follow, with small deals further driving up volumes.
As always, larger transactions will get done for the right assets, and we expect to see these increase as the year progresses.
For more insight and guidance get in touch with Nicola Sartori.
