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BFD Expert Voices - Retail Deals

BFD Expert Voices

Attendance was down at the Outdoor Retailer, according to Axios Denver's John Frank, who attended the annual event and reports on the challenges ahead for the industry. 

Brands such as Patagonia and North Face skipped the trade show.

Cotopaxi, a Bain Capital portfolio company, generated some healthy buzz, Frank reports. 

Overall, for 2021, the sector had plenty to celebrate with sales up 23% for the year ended November 2021 versus 2019, according to NPD Group.

Flashback: That growth sparked a surge of deal activity in the outdoor sector to more than double what it was in 2020, amounting to a total of 226 transactions, as tracked by SGB Online. 

Yes, but: The industry faces plenty of headwinds. 

What they're saying: Patrick Furlong, a director in Solomon Partners' consumer retail group, says a number of deals are preparing to launch in the first half of this year.

He notes that the record level of M&A across all industries makes 2022 a difficult comparable year and sporting goods in no exception.

Key trends include consumer demand for sustainability, plus heightened interest in lifestyle categories such as hunting and fishing, he adds.

What's next: Matt Powell, senior industry adviser for sports at NPD, tells me that acquisition targets in the space are brands that make one or two popular products really well but lack the capital to extend the business beyond that.

By the numbers: U.S. outdoor industry sales volume rose nearly 30% to $23.1 billion last year, according to NPD.

Of note: My colleague John also reported on his favorite items at the Outdoor Retailer. Check out the list. 

The bottom line: "It's going to be a good but not great 2022 for sports retail," NPD's Powell said during a remote presentation.

1 big thing: Outside M&A

Pedestrians and a bike rider make their way to the glass-clad Colorado Convention Center.

The Outdoor Retailer trade show returned last fall after a pandemic-induced hiatus. Photo: RJ Sangosti/MediaNews Group/The Denver Post via Getty Images

Win Brands Group, an omnichannel retail platform, said it raised a $40 million round led by PE firm Orangewood Partners and acquired outdoor lifestyle brand Love Your Melon.

Why it's the BFD: The platform's latest deal highlights the strong investor demand for active lifestyle brands, or, put another way, anything related to exercise, sports, outdoors.

Of note: The company said it achieved a 440% compounded annualized growth rate at the end of 2021.

2. The BFD: Win Brands nabs $40M round

Data: NPD Group; Chart: Kavya Beheraj/Axios

3. Retail therapy: chart of the day

Nicole Miller, a New York-based fashion label, sold a majority stake to investment firm Gordon Brothers for an undisclosed amount. The business is reported to generate about $250m in retail sales, Women's Wear Daily reports. wwd.com

Intimately, an adaptive lingerie brand for women with disabilities, raised a $1m round led by The British Fashion Council and U.K.-based VC firm Venrex, out of an investment fund the two created together, Venrex BFC Fashion I, Vogue Business reports. www.voguebusiness.com

Ilia Beauty, a cosmetics brand, is being bought by Courtin-Clarins family holding company Famille C for an undisclosed amount, WWD reports. wwd.com

Stoggles, an LA-based DTC protective eyewear provider, raised $40m from The Chernin Group. www.wearstoggles.com

Underlining, a Miami-based beauty and wellness products maker, raised $6m in seed funding led by Nordic Eye VC. www.underlining.co

Generation Growth Capital and Aldine Capital Partners bought Killer Instinct, a Windom, Minn.-based maker of branded crossbows and archery accessories. www.killercrossbows.com

4. Retail transactions

Kamau Witherspoon joins Shipt, the last-mile and same-day delivery service provider, as CEO. He succeeds Kelly Caruso in March and leaves his role as SVP of operations at Target. www.shipt.com

Alessandro Zanardo joins LVMH-controlled Italian eyewear company Thélios as CEO, succeeding Giovanni Zoppas.

J. Max Van Hoose was promoted to president of Harps Food Stores, an Arkansas-based supermarket chain, from EVP.

5. It's Personnel

As a New Yorker, it sometimes requires a rocket ship to escape the gravitational pull of the city to go to someplace a little wilder, if only for a weekend cleanse.

During the pandemic, the rush of city dwellers who also sought refuge in the woods and mountains of the Northeast transformed an already difficult trek into something akin to traveling to Mars.

My yearning to roam grew stronger as the months wore on. I finally made it to the shores of Oregon last summer, perhaps further afield than I initially envisioned, but it certainly did the trick.

6. A great escape

A sliver of coast overlooking the Pacific in the state of Oregon.

The Oregon coast. Photo: Richard Collings/Axios

Good morning, Retail Readers! It's Groundhog Day, and for those looking ahead to spring, the news isn't great from Pennsylvania. Sorry. 

Situational awareness: Party City, a distressed specialty retailer, was upgraded to a B- with a stable outlook by Fitch Ratings, another positive sign for the industry.

Of note: The theme of today's newsletter: the Great Outdoors. 

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February 02, 2022

1 big thing: Outside M&A