Axios Pro: Retail Deals
January 20, 2022
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Good morning, Retail readers!

  • Welcome to Day 2 of this newsletter, which features key M&A details on several companies, S&P's latest bankruptcy chart on the sector, and another Collings family situation, with a photo (see at the bottom).

Reminder: Register for today's virtual Pro kickoff event, where I will interview Jamie Salter, CEO of Authentic Brands Group.

1 big thing: Oxford on the prowl

A store front for the apparel brand Tommy Bahama.
Photo: Jeffrey Greenberg/Universal Images Group via Getty Images

Oxford Industries, the parent of resort-inspired brands such as Tommy Bahama, is "actively looking for appropriate acquisitions" for its portfolio, Jevon Strasser, its director of financial reporting, tells me.

Why it matters: The apparel conglomerate has so far navigated the pandemic and avoided the fates of competitors like Liz Claiborne and Jones Group, whose acquisition sprees ended in breakups.

Details: Oxford is sticking to its knitting, at least when it comes to M&A, eyeing apparel brands or related businesses in footwear or accessories, Strasser says.

  • The target either has to have a direct-to-consumer business or the path to one.
  • It would also need to be a business capable of full-price selling (not reliant on discounting) in both wholesale and DTC.
  • And it would have to have a strong management team that could complement the leadership at Oxford.
  • Finally, it would need to be profitable, as the acquirer is not interested in turning around a distressed company.

Be smart: As of October, the conglomerate had nearly $188 million in cash and short-term investments, according to SEC filings.

  • That number is likely to swell once holiday sales are accounted for.
  • And the company has no debt, giving it financial firepower to get a deal done.

Reality check: Valuations and multiples for potential targets Oxford has seen on the market recently appeared high, Strasser says.

Of note: The company is getting into the restaurant business with its Tommy Bahama Marlin Bar concept, which serves up custom cocktails and blackened mahi-mahi tacos.

  • Currently, there are eight locations, but by fiscal 2023 Oxford plans to open four or five locations per year.

The bottom line: "Hopefully the prices and expectations for targets in our sector will moderate in the future," he adds.

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