// UK retail sector M&A deals increase to 34 – up 21% on last year
// Overall, UK M&A activity has fallen 15% over the same period from 2,490 deals to 2,120
New research has found that the number of retail mergers and acquisitions has increased by 21% in the last year.
The number has increased from 28 transactions to 34 in the last 12 months, according to international law firm RPC.
UK M&A activity has fallen 15% over the same period from 2,490 deals to 2,120 M&A deals in the last year.
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In Q2 2022 (up until June 30), four of the nine retail M&A deals (44%) involved the acquisition of a distressed retailer such as Morrisons acquisition of McColl’s and Self Portrait buying Roland Mouret.
This is a significant increase given that just two deals involving distressed retailers occurred in the previous three quarters combined.
“The number of deals in the retail sector has held up remarkably well but that is partly due to an increase in the number of distressed retailers being put up for sale,” RPC co-head of retail Karen Hendy said.
“There are understandable concerns over whether retailers are going to able to pass on the sharp increases in their costs to customers and concerns over the depth of any recession which is leading to greater consolidation. We’re also seeing more partnerships where one retail brand takes space within another group’s stores.”
Hendy point out that deals were concentrated in small and mid-sized retailers with fewer of the “megadeals” that were seen the previous year.
She added: “There is still a lot of pent-up demand from PE and trade buyers especially for strong brands in premium fashion.
“If the Golden Quarter falls short, then we would also expect to see more activity from those funds that specialise in buying distressed retailers who have been fairly quiet over the last year.”
