The Retail Dealtracker report, covering the period from July 2022 to December 2023, unveils insights into the retail sector’s performance, highlighting the growing significance of tech-driven businesses and steady interest from Private Equity investors.
The Retail Dealtracker found that while 2023 was a mixed year for the retail sector, the rise of tech-enabled businesses in retail is attracting acquisition interest due to their transformative impact. Technologies like generative Artificial Intelligence (AI) and warehouse robotics are reshaping the industry by enhancing consumer connections and efficiency. In addition, the report showed there is consistent but cautious interest in retail and consumer markets from Private Equity investors.
For Private Equity investment to be truly successful for retail brands, the takeover should be seamless and not readily apparent to the brand’s customers. It is imperative brands undergoing outside investment maintain their authenticity and unique personality of the brand, which is what draws customers initially and ensures their continued loyalty.
In the Australian M&A landscape, deal volumes fell by 32 per cent in the 18 months to December 2023. Despite lower deal volumes, Australia remains attractive to investors, reporting $5.9b in reported domestic deals and $7.4b in reported cross-border deals.
The Pharmacy, Beauty and Apparel sectors stood out with high transaction values, driven by notable acquisitions like Aesop and Zimmermann. Overseas buyers, recognising the global appeal of these luxury brands, paid record values that Australian capital markets would unlikely match.
This report examines M&A and equity market activity in the Retail & Consumer Products sector between 1 July 2022 – 31 December 2023. The data in this report was compiled from several sources including the Australian Bureau of Statistics (ABS), S&P Capital IQ, the Australian Securities Exchange, Mergermarket, IBISWorld, company announcements and other publicly available information. Grant Thornton considers this consolidated multi-source analysis – supplemented with its own proprietary sources as a collaborative effort between its Corporate Finance and Management Consulting teams – to provide a comprehensive insight into recent deal activity.
Peter Thornely, Partner – Financial Advisory at Grant Thornton said: “Historically the Private Equity sector has produced high-profile retail investment success stories with consumer brands such as Burson Auto Parts, JB Hi Fi, Rebel Sports and Petbarn. The continued success of these diverse companies can be attributed to a shared common theme – their products are tied to important lifestyle aspects such as sport, cars, family, and pets – making them appealing for discretionary spending of customers.”
Grant Thornton released its Retail & Consumer Products sector Dealtracker report analysing Australian local mergers and acquisition (M&A) and equity markets from the 18-month period from 1 July 2022 – 31 December 2023.
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