Fashion acquisitions decline due to tariffs and consumer uncertainty

The retail and fashion acquisition market is facing challenges due to tariffs and concerns about consumer spending. Dealmakers, who usually remain optimistic, are feeling uncertain as President Donald Trump has started new trade wars that might complicate supply chains and make consumers anxious. At the beginning of 2025, many in the industry expected a good year for mergers and acquisitions. There were signs of life in the market, including several successful purchases of well-known fashion brands. However, that optimism is changing. Advisors reported that many deals that were planned for early in the year have stalled due to the unclear economic situation. Bankers had put together financial details needed for potential buyers and were hoping to finalize deals. But these plans have not come to fruition. Frank Petraglia, a deal advisory expert, mentioned that what seemed promising in late December has turned into a difficult environment for selling businesses. Before the trade disputes, there was a sense that the economy and deal market were in good shape. Consumer spending was steady, and inflation was low. However, President Trump’s current more aggressive economic policies have caused uncertainty. His trade policies have affected many countries, and this has led to a decline in consumer confidence, which has dropped significantly since December. As businesses now navigate this uncertainty, not all expect a quick resolution. Some companies are planning how to manage increased costs while others hope the situation will improve. Some dealmaking continues, but those moving forward are mostly between companies in similar sectors. Investment banker William Susman advised companies to be cautious and consider waiting out the uncertainty. Many business leaders have paused their decisions, signaling that the climate for acquisitions may remain challenging for the foreseeable future.