Fashion Forward: Why Apparel & Accessories Are Catching Investors’ Eyes

The final quarter of 2024 marked a turning point for the apparel and accessories sector. After a year of sluggish M&A activity and fluctuating consumer sentiment, signs of renewed momentum are now emerging.

At Cavendish, we’ve tracked a clear shift in valuation multiples and deal appetite. Apparel and accessories companies, which had lagged behind other consumer cohorts, are now showing signs of resilience and investor interest as we move into 2025.

Valuations on the Rise

Multiples within the apparel and accessories cohort surpassed hospitality in Q4, averaging 8.2x compared with 7.6x in Q3. Luxury brand Burberry led the rebound, recovering from a five-year low in September 2024. This uptick reflects improved consumer confidence in discretionary spending, particularly in higher-end segments.

While deal volume across the year was subdued, the logjam appears to be easing. A wave of newly announced transactions in apparel and accessories suggests strategic buyers are once again moving off the sidelines.

The E-Commerce

E-commerce players remain ahead of the curve. Multiples averaged 11x in Q4, continuing to outpace traditional retail. Their lighter, more flexible cost bases and ability to pivot quickly in response to demand have underpinned this resilience.

Many established retailers are responding by embedding e-commerce deeper into their strategies. Investment is flowing into AI-driven personalisation, mobile-optimised platforms, and omni-channel integration—moves designed to keep pace with changing consumer behaviour and valuation benchmarks.

Travel & Leisure and Hospitality Context

The wider consumer landscape also plays its part. Travel and leisure multiples climbed toward 10x in Q4, supported by a 4.7% increase in travel spend in December. Hospitality, by contrast, held steady, with freehold estates commanding a premium over leasehold operations. Despite tax breaks in the Autumn Budget, rising wage, energy, and insurance costs continue to compress margins.

Outlook for 2025

Looking ahead, macroeconomic shifts and improved consumer sentiment suggest apparel and accessories could be poised for stronger activity. Valuation recovery, combined with the easing of last year’s M&A slowdown, sets the stage for more transactions in the coming months.

For operators and investors alike, the key will be differentiation: finding value in resilient e-commerce models, high-quality brands, and businesses with scalable omni-channel strategies.

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