Accent Group sizing up Brands Collective proves M&As on agendas

Brands Collective is said to be performing well and the private equity owner is known not to be a forced seller.

Further evidence is emerging that retailers are embarking on mergers and acquisition activity despite the COVID-19 pandemic, with Accent Group said to have been on the cusp of buying privately held rival Brands Collective only weeks ago.

It is understood the parties were in exclusive talks last month, when Accent was set to buy Brands Collective. However, it walked away when they could not agree on price.

Accent owns shoe stores such as Hype, The Athlete’s Foot and Timberlands and sells brands such as Dr Martens, Skechers, Vans and Merrell.

The listed group reports its results on Wednesday.

 

Brands Collective has been owned by private equity firm Anchorage Capital Partners since 2014. It owns several well-known Australian brands, including Volley, Grosby and Julius Marlow. It also has exclusive licences for leading international brands including Superdry, Clarks, Hush Puppies, Mossimo and Lee Cooper.

The business sells through a combination of department stores and discount department store chains, as well as about 50 branded retail sites and several company-owned websites.

Brand Collective also owns the Shoe Warehouse chain of discount footwear stores.

Strong synergies are said to exist between both businesses, which was the attraction for Accent. However, Brands Collective is said to be performing well and the private equity owner is known not to be a forced seller.

Advisory firm Luminis Partners was making efforts to sell the business about a year ago.

However, some retailers are experiencing strong trading conditions, with consumers shopping in their spare time, given the inability to use disposable income for holidays abroad due to travel restrictions.

While the market value of Accent was hit by the pandemic around March, it has since rebounded to $858.86m.

Pacific Brands broke up the Brands Collective business and offloaded parts to three separate parties six years ago.

Anchorage Capital was one of the buyers, while Pas Group purchased the sport brands and a division of UK-based Sports Direct International bought the Dunlop and Slazenger brands.

The asking price for Brands Collective is said to be less than $100m.

The other retailer on the market through KPMG is Culture King. DataRoom understands that Culture King has been performing strongly through COVID-19, and US buyer Summit Partners was negotiating to make an acquisition, but walked away from a deal amid the pandemic. Another trade group is now believed to be circling.

Last month, women’s plus-sized fashion chain City Chic Collective was named the “stalking horse bidder” to buy the online assets of US company Catherines from the bankrupt Ascena Retail Group for at least $US16m ($22.3m).

Elsewhere, Qantas has hired Citi, CBA, Westpac and NAB to tap the bond market for more than $400m.