The insight: Fashion M&A activity is drying up as uncertainty and structural challenges dampen investor interest.

• The number of deals in the apparel and accessories category fell nearly 40% YoY globally in Q2, according to PitchBook data reported by Modern Retail.
• And investors are increasingly dragging their heels: Deals took an average of 71.7 days to close, compared with 58.5 days in 2024.

What it means: The decline is partly due to structural issues, as mid-tier brands struggle to stay relevant and companies like Shein and Temu disrupt the global fashion industry. But the biggest barrier at the moment is uncertainty, given the considerable risks that tariffs pose to the fashion industry as well as broader concerns around consumer spending. With the risk of more tariffs to come, companies are understandably reluctant to make moves that would strain their balance sheets.

However, it is a buyer’s market. The struggles of the past few years, coupled with the urgent need to manage costs, is pushing more companies to offload assets or seek a buyer. That has led to a number of notable deals, including Skechers’ take-private agreement, Dick’s Sporting Goods’ $2.4 billion play for Foot Locker, and Prada’s acquisition of Versace.

Our take: The current macroeconomic environment is not conducive to most M&A activity, as uncertainty pushes companies to conserve resources and focus on their core businesses. But for retailers in a relative position of strength—like Dick’s and Prada—now could be the time to make strategic acquisitions that either reinforce their existing advantages or enable them to diversify.

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