Fashion & Luxury Private Equity and Investors Survey 2020 - Global report - Deloitte
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Fashion & Luxury Private Equity and Investors Survey 2020 Global report
Contents
3
Preface
Methodology and contents 5
Key takeaways 7
Market Insights and Perspective of F&L Industry 11
M&A Deal Monitor 2019 23
Private Equity and Investors Survey 2020 33
Glossary and contacts 54
Fashion & Luxury Private Equity and Investors Survey 2020 | Preface
Preface
During 2019, Fashion & Luxury (F&L) continued to grab COVID-19 spread will strongly affect the balance technologies and the digitalization of the business
the attention of PE funds and Investors. Some have for 2020, which will likely be one of the most testing and luxury worlds are already affecting its key players
raised special vehicles to be on top of trends and to years in recent memory; not since financial crisis and their business models.
recognize the best assets in the industry. of 2008/09 has so much uncertainty pervaded
In this context, global investors interested in the
the market so quickly. The unstable global trading,
During 2019 we oversaw a globalization slowdown, Fashion & Luxury industry are reviewing their
political and macroeconomic environments, provide
the rise of populism in developed nations and expectations and strategies for the next years.
a major challenge for Fashion & Luxury players,
prominent geo-political instabilities affecting the
whose strategies, sales channels, supply chain and In order to analyze and measure market trends and
global economic scenario.
employees will likely be stressed to varying degrees. expectations on M&A activities, Deloitte has launched
In this context, despite market challenges and record The repercussions of this changing global landscape are the fifth edition of the “Global Fashion & Luxury
high valuations, the F&L industry remained a major quickly setting the bases for sharp changes in the F&L Private Equity and Investors Survey”.
priority for PE funds and Investors. industry, where the increasing presence of disruptive
3
Fashion & Luxury Private Equity and Investors Survey 2020 | Methodology and contents
Methodology and contents
The study considers more than ten sectors of the F&L industry, of which three are Personal Luxury Goods.
F&L INDUSTRY BUSINESS M&A DEAL PRIVATE EQUITY AND SECTORS COVERED MARKET SEGMENTATION
PERFORMANCE MONITOR 2019 INVESTORS SURVEY 2020
Personal Luxury Goods
CONTENTS
• Sales and margins performance • Size of M&A deals by F&L sector • F&L market outlook and
by sector • Target company profiles Covid-19 impact
Price point analysis
Consumers’ perception
• Analysis of F&L sectors’ • Investor profiles • Exit and investment strategies
attractiveness for investors in 2020 Absolute
• Analysis of global deals
• Covid impact assessment by sector, • Investors’ current portfolio of
focusing on Personal Luxury goods F&L assets
Apparel & Cosmetics & Watches &
SCOPE
GEO
Global Global Global Accessories Fragrances Jewellery Absolute
Aspirational
• Company annual • News and reports • Online survey based
Primary Primary Primary
financial reports and data level from major media on Computer
Luxury
data level data level
DATA SOURCE
presentations providers Assisted Web Aspirational
• Interviews with • Investor press Interviewing (CAWI)
C-level industry releases • Interviews with Accessible
Furniture Private Yachts Luxury Electric
experts • Company press Private Equity
Jets Cars Cars
• Deloitte expertise releases funds’ top
management
REMARKS
• The investors’ survey targeted senior members within private equity funds, with a substantial knowledge Fashion
of the F&L industry Digital Luxury
Luxury Luxury Luxury
Hotels Cruises Restaurants Goods Fashion
Full secondary data Full primary data
The study considers more than ten sectors of the
F&L industry, of which three are Personal Luxury Goods
5
Fashion & Luxury Private Equity and Investors Survey 2020 | Key takeaways
Key takeaways
Market Insights and Perspective of F&L Industry
Business Performance of the F&L industry in 2019 Fashion & Luxury outlook from market (PLG) the impact of Covid will be initially less severe
perspective with market projected to achieve 1.1 times the 2019
Within its analysis on F&L industry business
level by 2025 (~ +1.9% CAGR 2019-25F). The Other
performance, Deloitte aims at assessing sales and The Covid-19 pandemic is expected to have a significant
Luxury sectors are instead expected to suffer more the
profitability growth by each segment to highlight the impact on F&L industry with different immediate
Covid-19 impact (especially luxury Hotel and Cruises),
most attractive sectors for investors. The analysis has effects between Personal Luxury Goods (PLG) and
with an average drop of -25% in 2020/21, followed by a
been conducted on a panel of 81 players with a total Other Luxury sectors. For the Personal Luxury Goods
robust recover that will bring the market to 1.2 by 2025
sales of 633B$, 44 of them operating in the Other
(~ +2.4% CAGR 2019-25F).
Luxury sector and generating ~66% of sales, while
the other 37 players belonging to the Personal Luxury In terms of sectors, the market expects Luxury Hotels,
Goods sector and generating ~34% of sales. Cruises, Watches & Jewellery and Furniture to be
the most affected sectors by the pandemic, while
Overall, the panel of companies in the Personal Luxury
Cosmetics & Fragrances and Private Jets will be the
Goods sector reached in 2019, 1.3 times the 2015 sales
least affected. In terms of post Covid recovery speed,
level, growing at a +5.7% CAGR 2015-19, with a slight
Luxury Hotels, Apparel & Accessories and Cosmetics &
increase in profitability (+0.1%). On the other hand,
Fragrances will be at the forefront, benefiting from the
companies in the Other Luxury sector, reached in 2019,
re-open of borders and the increased focus on online
1.2 times the 2015 sales level, growing at a +4.1% CAGR
sales.
2015-19, with a slight decrease in margin of -0.2%.
Within the PLG sector, the market expects Europe and
Average EBITDA margin in Luxury sectors was +15.2%
the Americas to suffer a longer demand contraction
in 2019 (-0.1% vs 2015), with the Personal Luxury Goods
with an expected drop in sales from 30 to 40% and
sector outperforming the industry (+19.1% avg. EBITDA
expected recovery time from 12 to 18 months. The
margin). Apparel and Cruises are the top performing
mostly adopted strategies to overcome the crisis will be
sectors in terms of profitability (+24.6% and +23.3%
online distribution channels focus, digital marketing and
EBITDA margin), confirming with Cosmetics, the highest
promotion and environmental sustainability.
sales growth in the F&L industry in 2015-19 period.
7
Fashion & Luxury Private Equity and Investors Survey 2020 | Key takeaways
M&A Deal Monitor 2019
2019 Global M&A deal overview Other relevant acquisitions in 2019 involved Cosmetics
& Fragrances, Restaurants and Apparel &
The Fashion & Luxury industry proved to be fertile
Accessories companies:
soil for M&A activities with #271 deals registered in
2019, presenting a slight but stable increase of #6 • Coty, Inc. by JAB Holdings B.V. (~1.7B$ for 20%).
deals compared to the previous year. Personal Luxury
• Cooper's Hawk Winery & Restaurants (~700M$ for
Goods deals have decreased (-53 deals versus 2018)
100%).
with Cosmetics & Fragrances (12,5% of total) decreasing
by #10 deals, and both Watches & Jewellery (4%) and • Roberto Cavalli SpA by Damac Properties Co. LLC
Apparel & Accessories (17%) decreasing by #17 and #26 (~160M$ for 100%).
deals respectively. The Hotels sector, which represents
43% of total, was the best segment in terms of deals
M&A features and strategies
growth with respect to the previous year, increasing
by #40. M&A deal volumes in other sectors increased, Of the M&A deals completed, 55% were carried out by
with activity in Restaurants (+7) and Jets (+2) growing Top deals in 2019 Strategic investors (1%pts less than in 2018). Financial
compared to the previous year. The average deal value investors, involved in 45% of the total, increased only
Acquisitions in Watches & Jewellery, Hotels and
has decreased at $164m in 2019, with a $69m decrease slightly the number of deals (+5 YoY).
Automotive sectors drove numbers in 2019:
from 2018.
Strategic sellers were involved in 67% of the
• Tiffany & Co. by LVMH (~16B$ for 100%).
M&A deals in Europe slightly decreased (-4 deals), whilst transactions (vs.56% in 2018). Generally, bidders’
North America increased (+5 deals) and Asia-Pacific • Strategic Hotels & Resorts by Mirae Asset Global investments focused equally on a buyout and
remained almost flat. Investments Co (~5.8B$ for 100%). consolidation strategy (32% and 34% of the times
respectively).
Luxury Cars deals significantly increased during 2019 • Rivian Automotive, LLC by 4 round fundings (~2.9B$
(+6 deals), driven by the very active electric car’s for 100%).
industry.
8
Fashion & Luxury Private Equity and Investors Survey 2020 | Key takeaways
Private Equity and Investors Survey 2020
COVID-19 Impact from investors’ perspective 2020 investment strategy
Within its Private Equity Survey, Deloitte focuses on 70% of funds are considering investing in an F&L
understanding investors’ perceptions of the potential asset in 2019, with notable interest rising in: Apparel &
growth in the F&L market in coming years. Due to the Accessories (+28 pts), Cosmetics & Fragrances (+15 pts),
spread of Covid-19, investors expect to make changes Digital Luxury (+53 pts) and Furniture (-17 pts).
in the way they invest. In terms of sectors, in the next
Interest across these categories is increasing compared
three years investors expect Cars, Hotels, Restaurants,
to previous year, mostly noticeable at Digital Luxury
Cruises and Retailing to be the most affected sectors
Goods.
by the pandemic. Apparel, Watches, Yacht and Private
jets are foreseen to remain stable while Cosmetics & Both current investors and newcomers are more
Fragrances and Furniture will show a slight increase. attracted to consolidated sectors within the F&L
Digital Luxury will be the sector most benefitting from industry (such as Apparel & Accessories and Cosmetics
the pandemic and that is expected to sharply grow in & Fragrances) where market knowledge is widespread.
the next three years Newcomers seem more interested in Digital Luxury
Goods. With respect to 2019, the continuous
In terms of geographical areas, Asia and Middle East
consolidation of the F&L industry is moving investments
are expected to have a strong growth in the F&L
towards medium-sized companies (+17 percentage
industry, thanks also to a faster recovery from Covid-19
points), where investors plan to boost performance
pandemic. North America and Japan are expected to
by implementing internationalization, new production
remain stable in the next three years, while Europe
development (+14 percentage points) and digital
and Latin America are foreseen to suffer more from
strategy design (which grew by 11 percentage points).
Covid-19 impact and therefore to have a decrease
phase. The consensus is that forecast returns will range from
21 to 30%.
9Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Market Insights and Perspective
of F&L Industry Apparel & Accessories Watches & Jewellery Cosmetics & Fragrances Perso
111 57 55
Apparel & Accessories Cosmetics & Fragrances G
Market Insights: Deloitte Fashion & Luxury panel in 2019
Watches &24%
Jewellery 12% Personal
17%Luxury
Watches &20 11 6
111 57 55
Players Players 39% Players Goods
37
Apparel & Accessories Jewellery Cosmetics
12%& Fragrances Personal
17% Luxury 40%
24%
20 11 6
111 57 76% 55
Players Players 39% Players Goods
37
12% 17% 49% 40% 42%
24% Tot. on Tot. sales.Tot. Players
The Fashion & Luxury industry business performance
Players
analysis was conducted
111
76% B$
PlayersSales
a
20
39%
panel of 81 companies,
56.5B$ totalizing
49% Players
almost
Sales 40% Players
633B$ of B$
55.4 Sales 11 6 34%
37
Players 42% Players Players
Tot. Tot. Tot. of
111
76%
B$ 56.5 B$ by area
55.4B$ by area
34% by area
Top Players Map FY2019
Sales Players 49% Sales Players 42% Sales Players turnover
Tot. Tot. Tot. of
Apparel & Accessories 111 B$ Watches & Jewellery 56.5by
Luxury
B$ area Cosmetics & Fragrances
Cars 55.4Luxury
by
B$ area
Personal Luxury
Hotels
34% turnover
by area
Private Jets
Top Players Map FY2019
Sales Sales 357 Sales 32 8
111 Players 57 Players 55 Players Ot
by area
Luxury Cars Goods
Private Jets 4%
by area
12% 357 by area
Luxury 6%
Hotels 17% 32
Top Players Map FY2019
S
10 4 2
24% 8 37%
20 11 6 PlayersOther F&L
Players 14% Players Players
Players 39% Players
37 2
Luxury Cars 40% 4%
6%
Luxury Hotels 32 94% Private Jets Sectors
10 4
357 8 Players
82% 37%
76% Players Players 14% Players Other F&L 63%
6% 49% Tot. 4% 42% Tot. Tot.
Tot. Tot. Tot. of Sectors
56.5B$ SalesTot. Players357B$ 31.7B$PlayersSales 8.2B$
94%
10 4 2 34%
82% 37%
111B$ Sales Players 55.4 B$ 14%Sales
Sales
Players 63% Sales
44
Players Players
Tot. Players Tot.
turnover
Players Players
by area 357B$ Sales by area
94%
31.7 82%
B$ by area
Sales by area 8.2 B$
63%
by area
Sales
by area
Top Players Map FY2019
44
Tot. Players Tot. PlayersTot. Players
66%
Players
Luxury Cars 357 B$ Luxury Hotels
Sales 31.7
32
by area
B$
Luxury Cruises
Private Jets
Sales Players 5
8.2Furniture
by area
B$ Sales Players 4
by area
Yachts 5
44 5
357 Players 8 Other F&L of
66%
by area by area 29% by area Players
6% Luxury Cruises 4% 5 Furniture Yachts
Sectors38%
4 8 16
37% 4 turnover
10 Players
Luxury
94%Cruises
4 Players 14%
29%
Furniture 2
Players Players
Yachts 38%
Players
66 %
of Players
4 8 16
5 82% 4 100% 5 turnover
Players Players 63% 62%
Players
Tot. 29%Tot. Tot. Tot.
3.9B$PlayersTot.
38% Tot.
357B$ 4 31.7B$ 4.7B$
8.2B$ Sales 8 16 4.9B$
100%
Sales Players Sales Players 62%
Sales Players Sales Players Sales Players
44
Players Players Players
Tot. Tot. by area
by area 4.7B$ Sales
100% by area
Players
3.962%
B$ by area
Sales Players
4.9B$ Tot.
Players
by area
Sales Players
by area
Tot. by area Tot. by areaTot. of
81 66%
4.75 B$ 3.9 B$ 4.9 B$ by area
~ 633B$
Luxury Cruises Furniture 4 Deloitte
Yachts
Sales F&L
Sales Players
by area Panel: 5
Players Sales
by area
Players
Playersturnover
by area
Turnover
~ 633B$
29%
4 Players Deloitte
8 PlayersF&L Panel:
38%
16 81
PlayersPlayers
Turnover
62%81 ~ 633B$
Notes: Values reported at constant exchange rate Rest of the World North America
Deloitte F&L Panel:
100% Source: ElaborationPlayers
on Company Financial Report data Turnover
Tot. Tot. at constant exchange rate
Notes: Values reported Tot. Rest of the World North America Europe
4.7B$ Players
3.9B$
Source: Elaboration on Company Financial Report data 4.9B$
Sales Notes: Values reported at constant exchange rate Sales Players Sales Players
Source: by area on Company Financial Report data
Elaboration by area byRest
areaof the World North America Europe
~ 633B$
Notes: Values reported at constant exchange rate
Deloitte F&L Panel: 81 Players Turnover Source: Elaboration on Company Financial
Report data
Notes: Values reported at constant exchange rate Rest of the World North America Europe 11
Source: Elaboration on Company Financial Report dataFashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Market Insights: Sales performance 2015-19
The F&L top players sales index in 2019 is 1.3x the 2015 value. Personal Luxury Goods show a positive growth (+5.7% CAGR 2015-19) with a
stable EBITDA %. Other luxury sectors are growing less (+4.1% CAGR 2015-19), with a slight decrease in profitability.
2015-19 F&L Sales
2015-19 F&L SalesIndex
Indexevolution
evolution
(Index of Sales
Sales2015=100,
2015=100, Percentage) CAGR
(Index of Percentage)
2015-19
Personal +5. 7%
125 Luxury Goods
Other Luxury +4. 1%
Sectors
117
1.3x
1.2x
100
% change
2015 2016 2017 2018 2019 2015-19
EBITDA %
19.0% 18.5% 17.3% 18.4% 19.1% +0.1
PLG
EBITDA %
13.4% 12.6% 12.6% 13.1% 13.2% -0.2
Other Lux
Notes: Values reported at constant exchange rate
Source: Elaboration on Company Financial Report data and Desk analysis
Notes: Values reported at constant exchange rate
Source: Elaboration on Company Financial Report data and Desk analysis
12Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Market Insights: itability performance 2015-19
Average EBITDA margin in Luxury Sectors is 15.2% in 2019 (-0.1% vs 2015), with Personal Luxury Goods (+19.1%) outperforming the overall
industry. Apparel and Cruises are the top growing sectors in terms of sales growth and those with the highest profitability.
2019 Average EBITDA Margin by Sector
(Percentage)
2019 Average EBITDA Margin by Sector
(Percentage)
Personal Luxury Goods
Other Luxury Sectors
Average Personal
Luxury Goods
24,6% Avg.
+19.1% 23,3%
F&L 2015
+15.3%
16,6% 16,2% Avg.
15,1%
F&L 2019
12,2% 11,9% 11,3% +15.2%
5,3%
Apparel & Watches & Cosmetics & Cruises Hotels Private Jets Furniture Cars Yachts Panel
Accessories Jewellery Fragrances Average
% change
2015-19
+2.4 -1.0 -1.1 -4.7 +0.6 +1.7 +2.1 -4.5 +3.3 -0.1
% change
2018-19
+1.9 -0.6 +0.7 +0.1 -1.4 +0.1 +3.8 -1.8 +0.1 +0.3
Notes: Values reported at constant exchange rate
Source: Elaboration on Company Financial Report data
Notes: Values reported at constant exchange rate
Source: Elaboration on Company Financial Report data
13Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Market Insights: Business performance analysis 2015-19
Cruises and Cosmetics are the most attractive sector for F&L investors, with the highest sales growth and margin.
Apparel & Accessories is still the top performing category in terms of marginality.
F&L Sectors business performance map
F&L Sectorsbusiness performance map
(Percentage)
(Percentage)
28
High profitability Best in class Other F&L
sectors
Apparel & Accessories
Cruises Personal
Luxury
20 Goods
Watches & Jewellery Total Sector
18
(Percentage – 2019)
EBITDA Margin
Hotels Sales 2019
16
AVG
14 Cosmetics & Fragrances
Private Jets
12
Furniture
10
Cars
8
6
Yachts
4
2
Underperformers Fast growing – low performing
AVG
0
0 2% 4% 6% 8% 10% 12% 14
Sales growth
(Percentage – CAGR 2015-19)
Notes: Values reported at constant exchange rate
Notes: Values reported at constant exchange rate
Source: Elaboration on Company Financial Report data
Source: Elaboration on Company Financial Report data
14Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Covid impact on Luxury sectors – Market perspective
SECTOR PRE-COVID COVID IMPACT POST COVID RECOVERY
TREND
Global sales expected to drop significantly in 2020 Apparel and accessories is the category that most
Apparel &
Focus of next slides
(-20%) because of store closing and economic benefit from online sales, driving the growth in the
Accessories slowdown during Covid pandemic after Covid recovery period
High Covid impact (-20/25% on sales) during the Slow recovery is expected, since this category rely
Watches &
lockdown phase, since this category has not benefitted a lot on tourists flow and on a consolidate in-store
Jewellery from online sales purchasing process
Covid negative impact on Cosmetics has been slower Fast recovery focusing on online sales-channels and
Cosmetics & with respect to other Personal Luxury Goods categories skin care products
Fragrances (-11%), with major effects in Europe Customers will be more aware of natural ingredients,
with more attention on healthcare
Luxury The luxury segment is expected to be less impacted After Covid it is expected a solid recovery, in line with
from Covid thanks to a non-Chinese based value chain pre-Covid trend
Cars and high-level target customers
Luxury Hospitality is the most affected sector by Covid and The luxury segment is expected to boost fast as
also the luxury hospitality segment is suffering a lot borders re-open and people will be allowed to
Hotels from travel limitations travel
Private Expected increase in demand due to the shutdown The growth is expected to continue. Customers will
prefer private means of transportation to avoid law
Jets of commercial aviation because of Covid restrictions
restrictions and preserve health
Luxury High impact from Covid due to travel restrictions The impact of Covid is expected to affect sales for
a long time, particularly in the Asian market
Cruises and health security issues related to this business
It is expected a longer recovery time with some
Furniture The industry is highly suffering the impact of Covid concerns as expressed by some Luxury interior
designers and furniture brands
Immediate negative impact due to travel restrictions After Covid, it is expected an increasing interest in
Yachts Potential positive impact on demand due to prices private charters over group charters or cruise
lowering from suppliers holidays, boosting the recover
Historical market trend: Negative Stable Positive Post-Covid recovery: Strong Fast Gradual Very slow
Covid impact: High Low
Source: Elaboration on Desk analysis and interviews with industry experts
15
Source: Elaboration on Desk analysis and interviews with industry expertsFashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Covid-19 impact on Personal Luxury Goods (1/4) – Market perspective
“How
“How do you think
do you thinkCovid
Covidwill
willaffect
affect demand
demand and
and offer
offer in your
in your sector
sector by 2020?”
by 2020?” Key insights from C-Level of
(Percentage range)
(Percentage range) PLG companies
KEY INSIGHTS FROM C-LEVEL OF PLG
COMPANIES
“… Europe and Americas will suffer
longer the impact of Covid leading to a
North America Europe demand contraction
“… Europe because
and Americas will of the longer the impact
suffer
20-25% 25-30% pandemic
of Covidlockdown
downturn
leading toand
…”
the economic
a demand contraction because of
APAC the pandemic lockdown and the economic downturn …”
15-20% “… “…
As As
part of of
thetheSpring
part SpringSummer
Summer collection is still
collection is still unsold in store, wethe
unsold in store, we are reducing areproduction for
China & Japan reducing the production for the Fall
the Fall Winter anticipating the expected decrease in
Latin America 5-10% Winter anticipating the expected
demand, until the business will recover …”
decrease in demand, until the business
20-25% will recover …”
“… Our company, which is more focused on accessories
and leather goods, is not reducing the production
“… Our company, which is more focused
RoW since we can count on a rising demand from the
on accessories and leather goods, is
15-20% notonline sales
reducing channel
the …”
production since we
can count on a rising demand from the
online sales
“… Since channel
luxury …”
companies could no longer count on the
high flow of tourists’ consumption, we are dedicating
“… Since luxury companies could no
more attention on local customers …”
longer count on the high flow of tourists’
consumption, we are dedicating more
attention on local customers …”
Strong decrease Decrease Lower decrease
Source: Elaboration
Source: on Desk
Elaboration analysis
on Desk analysisand
andinterviews withindustry
interviews with industry experts
experts
16Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Covid-19 impact on Personal Luxury Goods (2/4) – Market perspective
“How do you think Covid will impact your business in 2020 in terms of sales’
“How do you think Covid will impact your business in 2020 in terms of sales’
contraction?” Key insights from C-Level of
contraction?”
(Percentage on respondents) KEY INSIGHTS FROM
PLG companies C-LEVEL OF PLG
(Percentage on respondents)
Expected drop in sales COMPANIES
“… We expect sales to be more affected
from 0% to 20% in the European and American
Europe From 20% to 30% market, “… We the
while expect
APACsales more affected in the
to bewill
market
5% suffer less due to a faster recoverymarket,
European and American time while the APAC
From 30% to 40%
15% …” market will suffer less due to a faster recovery time …”
> 40%
30%
“… It is expected a boost in the online
“… It is expected
sales channel, a boostthe
that will sustain in the online sales channel,
50% that will especially
market demand sustain theduring
market demand especially during
the
lockdownthepandemic
lockdown phase …” phase …”
pandemic
“… Companies that don’t have a
“… Companies that don’t have a fragmented footprint
fragmented footprint and build solid
relationships withsolid
and build relationships
suppliers will be with suppliers will be
capable to better sustain their business during the
capable to better sustain their business
APAC during the Covid
Covid period
period …”…”
Americas
5% 5%
“… Store closing in Covid phase 1 and
20% 10% “… Store closing
20% sanitary precautions thatinwill
Covid phase 1 and sanitary
be taken
in phase precautions
2, will have athat will be
strong taken in phase 2, will have
impact
30%
on physical retail impact
a strong and wholesale
on physical retail and wholesale
45% 55% channelschannels
(-20% to (-20%
-30% on sales).on sales). However it is
to -30%
55% However expected
it is expected a boost on
a boost on digital retail (+16%) and digital
digital retail (+16%) and digital
wholesale (+12%) channels…”
wholesale (+12%) channels…”
Source: Elaboration on Desk analysis and interviews with industry experts
Source: Elaboration on Desk analysis and interviews with industry experts
17Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Covid-19 impact on Personal Luxury Goods (3/4) – Market perspective
“When it is expected the normalization period and how Covid will affect the
“When it is expected
Geographical the normalization period and how Covid will affect the
footprint?” Key insights from C-Level of
Geographical footprint?”
(Percentage on respondents) KEY INSIGHTS FROM
PLG companies C-LEVEL OF PLG
(Percentage on respondents) Expected recovery time COMPANIES
“… Normalization period in Europe is
from 3 to 6 months
Europe expected“… gradually in 6 to 12
Normalization months.
period in Europe is expected
from 6 to 12 months In America we forecast a longer
5% gradually in 6 to 12 months. In America we forecast a
from 12 to 18 months recovery period (over the year) while
5% longer recovery period (over the year) while the Asian
the Asian market will recover faster.
> 18 months
However market will recover
a pre-Covid situationfaster.
will be
40%
50% possible only with athe
However vaccine situation
pre-Covid …” will be possible only with
the vaccine …”
“… In Europe, companies more focused
on Northern countries that have been
“… In Europe,
less impacted from Covid,companies
will have more focused on Northern
countries
higher benefits …”that have been less impacted from Covid, will
have higher benefits …”
“… Luxury shopping is likely to restart
first in China if the virus remains under
Americas APAC “… Luxury
control there. shopping
Continued is likely to
restrictions onrestart first in China
5% if the virus remains
travel will also mean that many under control there. Continued
0%
10% 15% 20% purchases that would
restrictions have been
on travel will also mean that many
made abroad will happen
purchases that wouldin China,
have been made abroad will
45% since Chinese shopping counts a
happen in China, since Chinese shopping counts a
significant slice of luxury consumption
45% significant slice of luxury consumption …”
…”
60%
Source: Source:
Elaboration on Desk
Elaboration on analysis and and
Desk analysis interviews withwith
interviews industry experts
industry experts
18Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Covid-19 impact on Personal Luxury Goods (4/4) – Market perspective
“Which will be the major drivers
and“Which will bethat
strategies the major drivers
you will adopt Classy luxury Key insights from C-Level of
to and strategies
overcome thethat youcrisis?"
Covid will adopt style
KEY INSIGHTS FROM
PLG companies C-LEVEL OF PLG
to overcome the Covid crisis? COMPANIES
High “… There won’t be a disruption in
product categories but we expect a
revamping “… of brand
There identity
won’t and the in product categories
be a disruption
valorization of classy luxury, with
but we expect a revamping of brand identity and the
customers seeking for elegant shapes
Digital valorization of classy luxury, with customers seeking
and neutral tones, reflecting a sober life
Collections Marketing & for elegant
consciousness …” shapes and neutral tones, reflecting a sober
breadth and promotion life consciousness …”
depth “… We are pushing more on the online
sales channel, signing partnerships with
e-commerce“… We are pushing
platforms …” more on the online sales channel,
Low signing partnerships with e-commerce platforms …”
“… We are pushing a lot on
digitalization to ensure the business
“… We are pushing a lot on digitalization to ensure
continuity, launching the first virtual
showroom thetobusiness continuity,
collect sales launching the first virtual
orders …”
showroom to collect sales orders …”
“… It is necessary to anticipate shifts in
Environmental consumer sentiment and behavior being
sustainability more aware “… Itofissustainability
necessary to anticipate
and of shifts in consumer
responsiblesentiment and behavior
consumption. Under being
this more aware of
Products value for
new framework, we are rationalizing
sustainability and of responsible consumption.
money awareness
collectionsUnder
and balancing prices …” we are rationalizing
this new framework,
collections and balancing prices …”
Pre Covid Online distribution
After Covid channels focus
Source: Elaboration on Desk analysis and interviews with industry expert s
Source: Elaboration on Desk analysis and interviews with industry experts
19Fashion & Luxury Private Equity and Investors Survey 2020 | Market Insights and Perspective of F&L Industry
Market Outlook: Sales forecast – Market perspective
After the drop in 2020 due to Covid impact, PLG is expected to achieve by 2025, 1.1 times the 2019 sales level (+1.9% 2019-25F CAGR).
Other luxury segment will initially suffer more from Covid impact, and will reach by 2025, 1.2 times the 2019 sales level (+2.4% CAGR
2019-25F) thanks to a robust and faster recover.
2010-25F F&L sales index outlook
2010-25F F&L
(Index on sales
Sales index outlook
2010=100)
(Index on Sales 2010=100)
CAGR
Other Lux idx growth: 1.2x 2019-25F
PLG idx growth: 1.1x
Other Lux idx growth: 1.9x 242 Personal
Luxury Goods
+1.9%
PLG idx growth: 2.2x 216 Other Luxury
Sectors +2.4 %
Drop due to Covid impact, that
will affect in particular other
luxury sectors (avg. -25% YoY 19-
20) with main consequences on
Hotels and Cruises Revenue
100
Forecast
2010 2015 2016 2017 2018 2019 2020FC 2021FC 2025FC
Notes: Covid assumptions under a basic scenario
Notes:Source: Elaborationunder
Covid assumptions on Company Financial Report data, Desk analysis and interviews with industry experts
a basic scenario
Source: Elaboration on Company Financial Report data, Desk analysis and interviews with industry experts
20Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
22Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
M&A Deal Monitor 2019
Fashion & Luxury M&A deals
Overview of deals in 2018 by sector Top luxury deals of 2019
Stake Value
265 271 +6
Month Target Bidder (%) ($m)
DEALS Nov.1 Tiffany & Co. LVMH Moet Hennessy Louis Vuitton SE 100 16,192
DEALS IN 2018 DEALS IN 2019
Strategic Hotels and
Sector Personal Luxury Goods (PLG) 2018 2019 Growth Sep. Restaurants Inc.
Mirae Asset Global Investemnts Co., Ltd. 100 5,800
Apparel & Accessories
73 47 -26
Dec. Rivian Automotive, LLC.
4 funding rounds (1st led by Amazon.com,
2nd by Ford Motors, 3rd by Cox Automotive
and 4th T. Rowe Ass)
100 2,850
Hotels
75 115 +40
Feb. Coty Inc. Jab Holdings B.V. 20 1,747
Watches & Jewellery
28 11 -17 Jun.
Millenium & Copthorne Hotels
Plc.
City Developments Limited 35 987
Cosmetics & Fragrances 44 34 -10
Nov. Deutsche Hospitality
Cooper's Hawk Winery &
Huazhu Group Limited 100 780
Jul. Ares Management LLC. 100 700
14 19
Restaurants
Furniture +5
May. Crown Resorts Limited Melco Resorts & Enterntainment Limited 20 608
Private Jets
9 11 +2 Nov. Kylie Cosmetics, LLC. Coty, Inc. 51 600
Yachts
8 4 -4 Sep.1 Byton, Ltd. China FAW Group Corporation Limited 100 500
Jun. Tatcha, LLC. Unilever Plc. 100 500
Cars (including Electric Cars)
6 12 +6
Oct. Sykes Cottages Limited Vitruvian Partners LLP. 100 481
Cruises 4 2 -2
Oct. Andaz Singapore Hoi Hup Realty Pte Ltd. 100 475
Restaurants 4 11 +7 Aug. Dream Cruises Holding Limited TGP Capital LP. 35 454
0 5
Jul. Freehand Hotels Queensgate Investments LLP. 100 400
Digital Luxury Goods +5
1) Still Pending | Note: the analysis considers both closed and announced deals during 2019 | Source: Elaboration on Deloitte intelligence data
23Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
M&A deals by region and sector 2019
Overview of deals in 2019 by Region
KEY FINDINGS
Europe North America Asia-Pacific
Japan and Europe were
-4 109 151 147 +5 59 58 63 +2 36 38 40 the regions which saw the
11 16 5
6 3
25 18 2 6 7 14 higher decrease of Fashion &
14 3 4 5 17
4 1 2 Luxury deals in 2019, with 5
18 16 6
16 12 17 6 2
8 10 and 4 less deals respectively.
21 15 12 10
50 54 8 5 31 North America presented a
10 2 slight increase (+5 deals) and
9 8
47 15
46 12 Asia-Pacific remained almost
37 14 14 7
8 1 flat with respect to 2018.
2017 2018 2019 2017 2018 2019 2017 2018 2019 Luxury Hotel and Apparel
deals were present in all
major regions, and were
Middle East Japan Rest of the world notable drivers of M&A
activity globally in 2019.
+7 3 2 9 -5 4 8 3 +1 6 8 9
Middle-East presented a
1 2 1 1
1 3 good increase (+7) in F&L
1 1 1
2 deals since 2018, thanks to
3 1 1 the Hotels segment.
8 4 4
2 5
1 4
1
1 2
1
2017 2018 2019 2017 2018 2019 2017 2018 2019
Apparel & Accessories Cosmetics & Fragrances Hotels Private Jets
Watches & Jewellery Yachts Others Variance 2018-19
# (Number of deals)
Source: Elaboration on Deloitte intelligence data
24Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
Size of main M&A deals
The F&L soil has continued to be a fertile one, with 271 M&A deals in 2019, showing a 2,3% increase from 2018. KEY FINDINGS
Personal Luxury Goods (-11% pts YoY) represent 34% of all deals.
Cars and Restaurants
registered #6 and #7 deals
more respectively compared
Number of deals in 2019 – Breakdown by sector
(Number of deals, Percentage)
to 2018.
Number of deals in 2019 – Breakdown by sector
Apparel and Watches &
(Number of deals, Percentage)
Jewellery deals decreased by
267 #26 and #17 respectively.
PLG YoY 2018-19 5 The Hotel sector has become
11
2
-53 11 4
12 34 more attractive to investors
19 % during 2019, becoming the
115 top gainer in terms of deal
number (+40).
66
55%
34 %
11
47
Apparel & Watches & Cosmetics & Hotels Furniture Private Yachts Cars Cruises Restaurants Digital Total
Accessories Jewellery Fragrances Jets Luxury F&L
Sector % 17.3% 4.1% 12.5% 42.4% 7% 4.1% 1.5% 4.4% 0.7% 4.1% 1.8% 100.0%
Var.
-26 -17 -10 +40 +5 +2 -4 +6 -2 +7 +5 +6
# 2018-19
Source: Elaboration on Deloitte intelligence data
Source: Elaboration on Deloitte intelligence data
25Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
Average value of main deals by sector
Deals related to the Cruises industry were the largest in 2019 as in 2018 with an average value of $436m. Cars and KEY FINDINGS
Cosmetics were the next largest with average value of $370m and $277m respectively. The average deal value of
PLG’s in 2019 was $140m*. Apparel saw their average
deal value fall in 2019, while
Averagevalue
value per Cosmetics (+340%YoY) and
Average perdeal
dealinin
2019 – Breakdown
2019 by sector
– Breakdown by sector
Average
($m, value
Percentage) per deal in 2019 – Breakdown by sector Restaurants (+509%) saw their
($m, Percentage)
Number
($m, of
Percentage) deals in 2019 – Breakdown by sector average value increase.
(Number of deals, Percentage)
F&L Average Cruises (-43%YoY), Automotive
436 F&L Average 267
Personal Luxury Goods (-61%% YoY), Hotels (-30%YoY),
436 Personal Luxury Goods Furniture (-93%), Private
PLG YoY 2018-19 370 Other 5
Luxury sectors
11 Jets (-79%) and Yachts
370 2
-53 11 4
12 Other Luxury sectors
34
(-95%) recorded remarkable
277 19 %
115 decreases.
277
198 186
198 186 164
164 146
146 66
55%
34 78 64 %
Avg. PLG
78 64 26 14
11 12
$140m
Avg. PLG 47 26 14 12
$140m
Digital Watches Private
Cruises Cars Cosmetics Hotels F&L Avg. Restaurants Apparel Yachts Furniture
Luxury
Digital &Watches
Jewellery Private
Jets
Apparel &Cruises
Watches &Cars Cosmetics
Cosmetics & Hotels Hotels Private
Furniture Restaurants
F&L Avg.Yachts Cars Apparel
Cruises Restaurants Yachts
Digital Total
Furniture
Luxury & Jewellery Jets F&L
Accessories Jewellery Fragrances Jets Luxury
Sector % 17.3%
YoY 2018-19 4.1% 12.5% 340% N/A
42.4% 7% 4.1% 509% 4.4%
1.5% 0.7% 4.1% 1.8% 100.0%
YoY (%)
2018-19 -43% -61% 340% N/A
-30% 509% -59% -34% -79% -95% -93%
Var. 0 -30%
(%) -26 -43%-17 -61% -10 +40 0 +5 -30% +2 -30% -4 +6 -59% -2 -34% +7 -79% +5 -95% +6-93%
# 2018-19
Note: The average deal value has been calculated based upon data of disclosed transactions
Source: Elaboration on Deloitte intelligence data
Note: The average deal value has been calculated based upon data of disclosed transactions
* Tiffany & Co. Deal has not been taken into account for the calculations but it was the largest one (around $16bn).
Source:
Source: Elaboration
Elaboration onon Deloitte
Deloitte intelligence
intelligence data
data
* Tiffany & Co. Deal has not been taken into account for the calculations but it was the largest one (around $16bn).
Note: The average deal value has been calculated based upon data of disclosed transactions
Source: Elaboration on Deloitte intelligence data
* Tiffany & Co. Deal has not been taken into account for the calculations but it was the largest one (around $16bn).
26Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
Target company features
Compared to the previous year, buyers slightly decreased the number of deals related to smaller sized firms, KEY FINDINGS
delivering higher average multiple, with a significant increase of the >15x EV/EBITDA multiple (59% of deals in 2019,
vs. 23% in 2018). In 2019, investors were still
oriented towards lower-
sized firms ($0-$51m) which
accounted for 62% of deals in
Target
Targetcompany features- Sales
company features - Sales Class
Class andand Multiples
Multiples
the year, but less than in 2018
(Percentage, Enterprise
(Percentage, Enterprisevalue EV/EBITDAmultiples)
value - EV/EBITDA multiples)
(65%).
There was a slight increase in
Target companies sales class CAGR Deal EV/EBITDA Multiple CAGR deals involving players in the
17-19 17-19 Medium Size market, between
Big size $51m and $250m, by 7% pts
16% 17% 13% -9.9%
(>$250m)
23% >15x +18.6% (-7.76% CAGR 2017-19).
Medium size 42% Deals involving multiples
18% 25% -7.7%
29% ($51m-$250m) 59% superior higher than 15
times the EBITDA increased
35%
(representing 59% of the total),
while there was a decrease in
31%
deals positioned on EBITDA
65% 62%
Low size 14% 11x-15x -3.6%
55% ($0m-$51m) +6.4% multiples of both 5-10x
42% between 5x and 15x.
17% 5x-10x +26.6%
27%
10%Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
Investor profiles
Financial investors were 45% of total bidders with Private Equity/Venture Capital representing 49% of them, while KEY FINDINGS
the majority of Strategic investors (70%) were involved in Other Industries or Hotels related deal in 2019.
Deals conducted by Strategic
investors, mainly operating
Main bidders’ profile in the Apparel & Accessories,
Main bidders’
(Percentage, profile
Number of deals)
Hotels and Other sectors,
(Percentage, Number of deals)
represent 81% of total deals.
The growth in the number
Financial Investors
+5 +1 Strategic Investors
Watches &
-10 of deals with respect to the
previous year was mostly
4% Jewellery
+4
-13 Other
15% 5% Cars driven by Financial investors
investors Cosmetics &
9% (+5 deals).
Fragrances -16
11% Apparel &
Financial Accessories -18
+10 36%
Services
30% Hotels +3
45%
55%
Private
Equity/ 49%
+8 Other
Venture 40% +34
Capital industries
Breakdown by investor Breakdown by investor
type core industry
Source: Elaboration on Deloitte intelligence data Change in number of deals YoY 2018-19
Source: Elaboration on Deloitte intelligence data
28Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
Portfolio exit strategies
In 2019 there has been a slight decrease in financial sellers (33% vs 43% of 2018), with the most significant part of KEY FINDINGS
the acquisitions carried out through buyouts and consolidations (32% and 34% of total respectively).
There was a slight increase
in M&A transactions carried
out by “strategic” sellers in
Exit types vs Investment strategies
Exit types vs Investment strategies
(Percentage, Number of deals)
2019 (67% vs. 57% in 2018).
(Percentage, Number of deals)
Furthermore, the exit patterns
YoY of Financial investors slightly
2018-19 decreased from 43% in 2018
Exit types patterns Investment strategy by bidder type (deals) to 33% in 2019.
2% 3% 3% Other +5 There was a good growth
3% 1% 1% Turnover +2
Sponsor to 16% 3% 3% Turnaround +1 in investments through
Financial 7%
sponsor 25% Seller Consolidation (+22 deals)
34%
17%
33% 17%
34%
Consolidation +22 and Acquisition Capital (+7),
Sponsor to reflecting the higher number
strategic 11% of deals carried out by
9% 55%
Strategic investors.
26% Acquisition +7
28% 9% capital
Strategic to
sponsor 38% Growth -19
Strategic 18%
34% capital
Seller
3%
67% 11%
39% 45%
Strategic to
strategic 25% 32% Buyouts -12
22% 23%
2017 2018 2019 Financial Strategic Total
investor investor
Notes: The deal strategy analysis has been performed based upon data of disclosed transactions
Source: Elaboration on Deloitte intelligence data
Notes: The deal strategy analysis has been performed based upon data of disclosed transactions
Source: Elaboration on Deloitte intelligence data
29Fashion & Luxury Private Equity and Investors Survey 2020 | M&A Deal Monitor 2019
Bidders’ investment stake
Majority stake in the Personal Luxury Goods deals remained the same in 2019 reaching 85%, while both the Other luxury
sectors (86%) and the Total F&L (90%) increased in 2019. The growth was driven by a larger percentage of Strategic investors.
Investment stakes by sector
Investment
(Percentage) stakes by sector
(Percentage)
47 11 34 19 115 11 4 2 12 11 5 271
9% 5% 9% 10% Minority
18% 18% 25% 25%
50%
91% 95% 91% 100% 100% 100% Majority
82% 82% 90%
75% 75%
50%
App&Acc Wat&Jew Cos&Fra Furniture Hotels Private Jets Yachts Cruises Cars Restaurants E-commerce Total F&L
platform
PERSONAL LUXURY GOODS OTHER LUXURY SECTORS TOTAL LUXURY SECTORS
85% Majority 86% Majority 90% Majority
+0%pts (change 18-19) +1%pts (change 18-19) +5%pts (change 18-19)
Note: Undisclosed investment stakes deals have been excluded from the analysis
Source: Elaboration on
Note: Undisclosed Deloitte intelligence
investment data
stakes deals have been excluded from the analysis
Source: Elaboration on Deloitte intelligence data 30Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
Private Equity and Investors Survey 2020
Fashion & Luxury market outlook from investors perspective
Market Outlook: Key Investors foresee a significant Covid impact in the next three years with Cars, Hotels, Restaurants,
Cruises and Retailing as the most negatively affected sectors. Apparel, Watches, Yacht and Private jets
trends by sector – are expected to remain stable, while Cosmetics & Fragrances and Furniture will show an increase. Digital
Investors perspective luxury will be the sector reaching the strongest increase thanks also to a positive effect of the pandemic.
Expected F&L market trends for the next 3 years – Breakdown by sector
Expected F&L market trends for the next 3 years – Breakdown by sector
(Index on responses)
(Index on responses)
Strong
Increase
(> 10% per
year)
Increase
(5-10% per
year)
Stable
Decrease
(< 0%
per year)
App&Acc Wat&Jew Cos&Fra Cars Hotels Restaurants Yachts Cruises Private Furniture Retailing Digital Total
jets luxury F&L
Personal Luxury Goods Other Luxury sectors
2019-20 change Source: Elaboration on Deloitte
survey and interviews with industry
in sentiment experts
Source: Elaboration on Deloitte survey and interviews with industry experts
33Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
Market Outlook: Key trends by geographical area - Investors perspective
Investors expect the Asian and the Middle Eastern areas to have a faster recover after the negative Covid impact, with a growth of
the F&L industry. On the other hand, Europe and Latin America are expected to suffer more, showing a decrease in the next years.
Expected F&L
Expected market
F&L trends
market in in
trends the next
the 3 years
next – Breakdown
3 years – Breakdownby
byregion
region
(Index on responses)
(Index on responses)
Strong
Increase
(> 10%
per year)
Increase
(5-10% per
year)
Stable
Decrease
(< 0%
per year)
Europe North Latin Japan Asia Middle Rest of Total
America America East the World F&L
2019-20 change
in sentiment
=
Source: Elaboration on Deloitte survey and interviews with industry experts
Source: Elaboration on Deloitte survey and interviews with industry experts
34Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
Market Outlook: Covid-19 impact on F&L sectors – Investors perspective
F&L sectors that will be mostly affected by the spread of Covid-19, will be Hotels (31%), Restaurants (22%), Cruises KEY FINDINGS
(18%), Cars (13%) and Apparel & Accessories (9%). As it is predictable, those sectors related to tourism will be the
mostF&L
Main affected ones.
sectors affected by Covid-19 “Out of the home” luxury
Main F&L sectors affected by Covid-19
(Percentage of respondents) experiences as Luxury
(Percentage of respondents) Hotels, Restaurants and
Main F&L sectors affected by Covid-19
Cruises will be the most
(Percentage of respondents)
affected by the spread
of Covid-19, respectively
31% according to 31%, 22% and
31% 18% of respondents. Cars
and Apparel & Accessories
22% will also be affected but with
22%
18% a lower impact (13% and 9%).
18%
13% Other luxury sectors as Digital
13% Luxury Goods, Cosmetics &
9% Fragrances, Yachts, Watches
9%
4% & Jewellery, Private jets and
1% 1% 1% 4% Furniture will be the least
1% 1% 1% 0%
0% affected by the spread of
Hotels Restaurants Cruises Cars App & Acc Watches & Yachts Digital Cosmetics & Other Covid-19.
Hotels Restaurants Cruises Cars App & Acc Watches
Jewelley& Yachts Digital
Luxury Cosmetics
Fragrances& Other
Jewelley Luxury Fragrances
Note: 1) “Other F&L sectors” includes: F&L retailing
Source:
Note: 1) Elaboration on Deloitte
“Other F&L sectors” surveyF&L retailing
includes:
Source: Elaboration on Deloitte survey
24
24
Source: Elaboration on Deloitte survey
35Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
Market Outlook: Covid-19 negative impact on 2020 revenues
and future investments – Investors perspective
KEY FINDINGS
Despite the fact that for 40% of investors the impact on revenues will be between 21 and 30%, and that for 32% of
Covid-19 is expected to have
them will be between 31 and 40%, 79% of them will continue investing or scouting in the F&L industry in the future.
heavy impacts on companies’
Impact on 2020 Revenues of F&L Companies Will continue investing in F&L industry revenues, 40% of investors
Impact on 2020
(Percentage Revenues of F&L Companies
of respondents) Will continue
(Percentage of investing
respondents) in F&L industry will have an impact between
Impact
Impact
(Percentage on
on20202020 Revenues
of respondents) ofF&L
Revenues of F&LCompanies
Companies Will
Willcontinue investingininF&L
continue investing
(Percentage of respondents)
F&Lindustry
industry
(Percentage
(Percentageofofrespondents) (Percentage 21 and 30% and 32% of them
respondents) (Percentageofofrespondents)
40% respondents)
predict to have an impact
40% on revenues between 31
40%
and 40%. Despite these high
32% 21%
21% impacts, 79% of investors
32% 21% admit they will continue
32%
investing in the F&L industry.
57%
57% 21%
57% 21%
14% 21%
14%
14%
7%
7%
4% 7% 4%
4% 4% YES YES (with restrictions)
4% 4% NO
NO YES YES (with restrictions)
0-10% 11-20% 21-30% 31-40% 41-50% > 50% NO YES YES (with restrictions)
0-10% 11-20% 21-30% 31-40% 41-50% > 50%
0-10% 11-20% 21-30% 31-40% 41-50% > 50%
Source: Elaboration on Deloitte survey
Source: Elaboration on Deloitte survey
Source: Elaboration on Deloitte survey
25
25
Source: Elaboration on Deloitte survey 25
36Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
Market Outlook: Covid-19 impact by geographical area – Investors perspective
F&L geographies that will be mostly affected by the spread of Covid-19, will be Europe (53%) which is predictable, KEY FINDINGS
due to the fact that a large amount of the F&L companies are based in this region, North America (18%), Japan
(8%), Asia (10%) which is an growing geography for F&L and Latin America (5%). Europe and North America
are expected to be the regions
most affected by the spread
Main geographies affected by Covid-19
of Covid-19, respectively with
(Percentage of respondents)
Main geographies affected by Covid-19 53% and 18% These results
(Percentage of respondents) are predictable due to the
fact that a large portion
of the Fashion and Luxury
28% companies are based in these
25% regions. Japan is also expected
to be affected although on a
18% smaller percentage.
10%
8%
5% 6%
Southeast Northwest North America Asia Japan Latin Rest of the
Europe Europe America World
Source: Elaboration on Deloitte survey
26
Source: Elaboration on Deloitte survey
37Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
2019 Investment and Exit Strategy
Expected new investments in 2020
KEY FINDINGS
Personal Luxury Goods remain the most attractive sectors for investors, with Apparel & Accessories and Cosmetics
The sectors considered to
& Fragrances being the most prominent ones. Investments in Digital Luxury Goods are expected to increase.
be most attractive based
on survey respondents are:
Apparel & Accessories (107%),
100% Most attractive sectors for investors Change in 2019-20 Cosmetics & Fragrances (93%),
(multiple choice questions) (Percentage points)
Furniture (40%) and Digital
30% No Luxury Goods (60%). Interest
Apparel & across sectors is decreasing
Accessories
107% 28pts
compared to last year across
Cosmetics &
Fragrances
93% 15pts almost all the sectors. Digital
Luxury Goods on the other
Digital Luxury
Goods
60% 53pts hand (60%) increased by 53
70% percentage points.
of PE Yes Furniture 40% -17pts
funds
F&L Retailing 20% -9pts
Watches &
Jewellery
13% -22pts
Will your fund
Restaurants 7% -14pts
acquire an F&L
asset in 2020? Other 1 7% -36pts
Personal Luxury Goods Other F&L sectors
Notes: 1) Other includes Hotels, Private Jets, Cruises, Yachts and Cars
Source: Elaboration on Deloitte survey
27
Notes: 1) Other includes Hotels, Private Jets, Cruises, Yachts and Cars | Source: Elaboration on Deloitte survey
38Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
F&L sector attractiveness
Both Apparel & Accessories and Cosmetics & Fragrances are remarkably attractive to investors. Digital Luxury has KEY FINDINGS
shown a notable increase since previous years, becoming a star sector for potential investments in the coming year.
The Digital Luxury Goods
Map of investor attraction in F&L sectors sector seems to attract more
investors compared to last
Map of investor attraction in F&L sectors
year, resulting in a positive
60 delta from last year’s result.
Digital Luxury Apparel Apparel & Accessories, as well
50 Goods & Accessories as Cosmetics & Fragrances
Cosmetics are the two sectors that
40 & Fragrances remain the primary choice for
30 investors, attracted by higher
margins.
Change in 2019-20
20
(Percentage points)
Both sectors show an
10 Selective investment propensity above
Retailing 90% in 2020.
0
-10
Furniture
-20 Watches
& Jewellery
-30
-40 Other1
-50
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%
Investment propensity 2020
General investor propensity Previous year position
(Percentage of respondents)
Note:
Note: 1)
1) Other includesHotels,
Other includes Hotels,Private
PrivateJets,
Jets, Cruises,
Cruises, Yachts
Yachts andand
CarsCars
Source: Elaboration on Deloitte survey
Source: Elaboration on Deloitte survey
39
28Fashion & Luxury Private Equity and Investors Survey 2020 | Private Equity and Investors Survey 2020
Sector attractiveness: current vs potential investors
Both current and new F&L investors are willing to invest in consolidated sectors such as Cosmetics & Fragrances KEY FINDINGS
and Apparel & Accessories. Even though newcomers seem attracted also by other segments such Digital Luxury
and Furniture. As the most established
Map of investor attraction in F&L sectors – Current vs potential investors sectors, Cosmetics &
Fragrances and Apparel &
Map of investor attraction in F&L sectors – Current vs potential investors
Accessories remain the main
target for all investors.
120
Attractive sectors for new Furniture has become a highly
110
investors attractive sector for new
100 investors in 2020, in line with
Cosmetics & previous year's trend.
New F&L investors’ propensity
90% Apparel &
Fragrances
Accessories New investors will especially
(Percentage of respondents)
80%
target innovative segments
70% such as Digital Luxury.
60%
50%
Digital Luxury
40%
Goods
30% Furniture
20%
Selective
10% Restaurants Retailing
Attractive sectors for
0% Other Watches and Jewellery current investors
-10
-10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130%
Current F&L investors’ propensity
General investor propensity
(Percentage of respondents) Previous year position
Source: Elaboration on Deloitte survey
Source: Elaboration on Deloitte survey
40
29You can also read
