How players like LVMH and Kering shaped fashion M&A over 25 years

Tapestry’s $8.5 billion acquisition of Capri Holdings may have ultimately fallen apart in 2024, but the potential merger at the time underscored how the stakes for mega acquisitions in fashion today have changed since the turn of the 21st century.

While Tapestry primarily targeted scale, global luxury positioning, and cost synergies, conglomerates like LVMH and Kering (known as PPR until 2013) had slightly different motivations as they built their portfolios in the early 2000s.

While LVMH lapped up retailers like Emilio Pucci in 2000 and Fendi in 2001, Kering—with brands like Gucci and Yves Saint Laurent already under its umbrella—acquired Bottega Veneta in 2001.

The result? A concentrated industry where a few large groups own many of the marquee brands.

“The early 2000s was really the creation of the conglomerate, in particular with luxury,” Jana Gold, managing director at Alvarez & Marsal’s private equity practice, told Retail Brew.

And with a strong foothold established in fashion, the next step for the mega players was “expansion and diversification,” Gold said, as conglomerates began to eye footwear and streetwear labels to give them an edge.

Consolidation nation: By the mid-2010s, this model had expanded well beyond haute couture and luxury. Mid-market players like PVH (owner of Calvin Klein and Tommy Hilfiger) and Tapestry (owner of Coach and Kate Spade New York) were building empires of their own.

It was also the age of digital disruption as e-commerce got bigger with brands like Net-a-Porter and Farfetch leading the pack.

According to Gold, it’s also when both luxury and more accessible players leaned into purchasing “digitally native brands” and strengthening their online prowess.

Globalization created new markets but also new pressures. Luxury houses needed presence in China and the Middle East, while accessible brands chased growth in Asia and Latin America.

For LVMH and Kering, that meant looking east, opening flagships in Shanghai, Tokyo, and Dubai, and investing heavily in digital storefronts through platforms like Alibaba’s Luxury Pavilion. Meanwhile, mass and premium players such as Inditex, H&M, and PVH expanded their store networks and local manufacturing in India, Southeast Asia, and Latin America.

Closer to home, brands like Ralph Lauren—with lines like Polo, Lauren, and Chaps—grew its international presence through franchise and joint-venture models.

Meanwhile, private equity firms like Permira, Carlyle, and L Catterton became a major force in shaping mergers and acquisitions with stakes in everyone from high-end labels to DTC startups.

In fact, PE has fueled some high-profile turnarounds including Jimmy Choo’s evolution under JAG Acquisitions or SMCP Group’s (Sandro, Maje, Claudie Pierlot) global expansion.

Better together: Gold believes while the industry can be “challenging,” it can also be rewarding, crediting the revival of brands like J. Crew and Brooks Brothers to PE.

But while PE certainly has a grip on parts of the industry, conglomerates like LVMH continue to be power players.

Although Covid-19 briefly paused M&A, as supply chains froze and discretionary spending plunged, the dealmaking arguably returned with a bang as LVMH completed an acquisition of Tiffany and Co. that signaled luxury’s appetite for growth hadn’t dimmed.

Still, the Covid-19 and pre-Covid years have shifted the stakes for acquisitions, according to Gold.

“In the early 2000s, it was much more so ‘buy it and they will come,’” she said. “It was almost a demand; it was expected. If you do an acquisition or a merger, you banked on almost just the equity of the brand, like, ‘Oh, it’s a good brand. It’ll work. And we could probably combine some of our operations and make it better, but not really touch it.’”

Over the past decade, however, Gold said companies realized they needed to have a “value creation plan.”

“Just to consolidate doesn’t fully make sense anymore,” she said. “Sure, you’ll add to your top line, but the complexity that you’re bringing in by having another company, you need to really think through, ‘How am I going to get the benefit of the global scale by acquiring this brand or merging two brands?’”

As fashion enters its next 25 years, Gold said that with AI and shifting consumer expectations the success of any merger will depend on “upfront planning…not just for the top line, but also those operational levers” that set a brand up for success. As she put it, “the real work starts once the deal is closed.”

This is one of the stories of our Quarter Century Project, which highlights the various ways industry has changed over the last 25 years. Check back each month for new pieces in this series and explore our timeline featuring the ongoing series.

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