Mergers and acquisitions: PwC says fashion and luxury sector is increasingly selective

Mergers and acquisition operations in the consumer sector are slowing down globally. However, seven mega-deals exceeding 5 billion dollars are boosting overall value. In Italy, 158 transactions were announced in the first five months of 2025. These are some of the findings detailed in the report 'PwC Global & Italian Merger and Acquisition Trend Consumer Markets – Mid Year ‘25 Outlook'.

Merger and acquisition operations in consumer markets decreased by 9 percent globally in the first five months of 2025

After a start to the year marked by cautious optimism, expectations of a recovery in merger and acquisition operations in the consumer sector, namely the fashion and luxury, food and beverages, beauty and personal care, retail, hospitality and leisure, and packaging sectors, have progressively cooled according to PwC’s Global & Italian M&A Trends Consumer Markets report. The macroeconomic context, characterised by inflationary pressures, interest rates and uncertainty about duties, has weakened investor confidence and consumer sentiment. This has slowed down the market’s growth dynamics.

In detail, in the first five months of 2025, merger and acquisition volumes in consumer markets decreased by 9 percent globally compared to the same period in 2024. This marked a more contained decline than the minus 11 percent recorded in overall market volumes. Conversely, transaction values increased by 32 percent, supported by seven transactions exceeding five billion dollars in value announced in the first half of 2025.

The Italian market reflects the global trend. In the first five months of 2025, 158 transactions were announced in consumer markets, down 7 percent compared to the 170 deals recorded in the same period of 2024. The main decrease is linked to transactions announced by financial investors, down 17 percent. Their share of total transactions fell to 40 percent in the first half of 2025, compared to 45 percent reached in 2024, confirming greater caution among investors in sectors such as food and beverage and fashion.

Transaction gestation times have lengthened, reflecting greater caution on the part of both strategic operators, who are conducting portfolio reviews and revising their strategies, and private equity funds. This has resulted in a widening of the bid-ask valuation gap.

According to PwC’s analysis, the fashion and luxury sector remains active, but increasingly selective. In Italy, 26 transactions were recorded in the first five months of 2025, down 26 percent compared to the same period in 2024. Despite the uncertain environment, large deals, such as Prada’s acquisition of Versace, confirm the sector’s attractiveness and the ability of strategic investors to seize new opportunities, even on complex dossiers and turnaround operations.

Private equity funds continue to be active, albeit cautiously and with a greater focus on assets with stable performance and good cash flows, as confirmed by the Blue Pool Capital and Golden Goose, Alto Partners and Gallo, Borletti-Quadrivio and Twinset deals, or on turnaround operations such as Bluestar Alliance on Palm Angels.

Consolidation dynamics along the supply chain are confirmed, both by strategic operators, with operations such as Prada and Rino Mastrotto; Richemont and Maglificio Miles; Chanel and Grey Mer, Mantero Sera, Leo France, Gentili Mosconi and Manifatture Tessili Bianchi; and by financial investors, with the acquisitions of Armonia on Millefili, Sienna SA on Vicenza Mode, and J Jardin on Nanan. Conversely, smaller manufacturing companies and business-to-business fashion platforms sponsored by financial operators are suffering a generalised decline in volumes, leading to the evaluation of refinancing operations.

Beauty segment is among the most dynamic

The personal care and cosmetics sector is among the most dynamic in terms of mergers and acquisitions, driven by a dual push: the interest of private equity funds and supply chain consolidation by strategic operators. Between the end of 2024 and the beginning of 2025, the Italian beauty sector was the protagonist of significant operations, which contributed to strengthening its international positioning.

In particular, Give Back Beauty acquired Angelini Beauty to expand its portfolio of luxury fragrances, and Ancorotti acquired Cosmoproject, creating an integrated hub in contract cosmetics between skincare and make-up. Finally, the German fund Dbag acquired Great Lengths, focusing on Italian excellence in professional hair extensions and the brand’s global growth.

Outlook for the second half of 2025

In a statement, Emanuela Pettenò, partner and Markets Deals Leader, Pwc Italy, said: “Consumer markets companies are currently penalised by depressed valuations, which will benefit investors capable of dealing with operational and financial turnaround situations. Private equity funds will be increasingly selective and focused on food and beauty, which are more resilient sectors.

"On the acquisition front, funds could increase “take-private” and portfolio add-on operations, while disposals of assets with below-budget performance and those most impacted by duties will be postponed. Strategic operators in retail and food will focus on the supply chain and technological assets, investing in customer experience, with marketing platforms, e-commerce, payment systems, and inventory management solutions. In fashion, we expect turnaround operations and the entry of partners into brands still controlled by families."

This article was translated to English using an AI tool.

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Mergers and acquisitions

Prada

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Quadrivio

Twinset

Versace