It has been a really interesting year in the retail industry. It has been a year of companies joining forces in an increasingly competitive retail environment to try and succeed. It has been a year of the bigger is better approach.
Let’s start by looking at big department store retail.
In October, Hudson’s Bay Company, which owns Lord & Taylor along with a couple of Canadian chains, won shareholder approval for its purchase of Saks Inc. Another high end department store chain, Neiman Marcus, also changed hands but it was not to merge with another retailer, it was sold to a private equity firm.
In February, Signet Jewelers planned to acquire Zale Corporation in a $1.4 billion deal. It was the culmination of consolidation in the jewelry industry. These are two of the biggest jewelry retailers in the United States and their union will create a chain of more than 3,600 stores in three countries.
After some back and forth among the various shareholder groups, the dust settled in May and it is a done deal.
Just a few weeks ago, Chinese retailer Chow Tai Fook, which rivals the new Signet-Zale in size, is planning to buy the Boston based diamond brand, Hearts on Fire for $150 million.
This is huge for both companies. Hearts on Fire has an entryway into the Chinese market along with some deep pockets and it gives Chow Tai Fook possession of a well established American brand. Every international retailer in the world wants an ‘in’ into the U.S. marketplace and who wouldn’t want an ‘in’ into the Chinese marketplace?
It’s a small world my friends and in business it just keeps getting smaller!
By far one of my favorite couplings, was the 2013 announcement that the Swatch Group was buying the Harry Winston name and its network of retail stores nationwide. This transaction provides Biel/Bienne, Switzerland based Swatch, which already owns a number of high end watch brands, a foothold into the luxury jewelry market. Swatch owns Harry Winston. Can I buy a Swatch watch at Harry Winston now? Just kidding, still……that is one weird duo.
For years industry talk has been that either Kering or LVMH will purchase Tiffany & Co. after their difficult few years. It has not happened yet but stay tuned, anything is possible!
Who’s next, David Yurman, Scott Kay or John Hardy? All seemed primed for either a buyout or a merger.
Anyone want to make a prediction about who will be bought or sold, in or out of business by next year? The sky’s the limit!