{"id":44276,"date":"2017-08-01T04:04:36","date_gmt":"2017-08-01T02:04:36","guid":{"rendered":"https:\/\/newserver.fyb.de\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/"},"modified":"2017-08-01T04:04:36","modified_gmt":"2017-08-01T02:04:36","slug":"short-and-long-term-analysis-of-merger-success-in-the-fashion-industry","status":"publish","type":"product","link":"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/","title":{"rendered":"Short- and long-term analysis of merger success in the fashion industry"},"content":{"rendered":"

Prof. Dr. Dirk Schier\u00adeck<\/strong> \u2014 Chair of Corpo\u00adrate Finance Darm\u00adstadt Univer\u00adsity of Technology<\/p>\n

Dr. Stef\u00adfen Meins\u00adhau\u00adsen<\/strong> \u2014 Rese\u00adarch Asso\u00adciate Darm\u00adstadt Univer\u00adsity of Technology<\/p>\n","protected":false},"excerpt":{"rendered":"

The fashion indus\u00adtry accounts for more than $500 billion, or more than 4%, of the worl\u00add\u2019s annual trade volu\u00admes, unders\u00adcoring its great importance to global commerce. Moreo\u00adver, the indus\u00adtry has also seen a large number of mergers over the past deca\u00addes; howe\u00adver, these have not been the subject of recent empi\u00adri\u00adcal studies in corpo\u00adrate finance rese\u00adarch. The objec\u00adtive of this paper is to shed light on the short- and long-term, as well as capi\u00adtal market- and accoun\u00adting-based perfor\u00admance of M&A tran\u00adsac\u00adtions in the inter\u00adna\u00adtio\u00adnal fashion and leather access\u00adories indus\u00adtry from 1994 to 2007. It also analy\u00adzes the key drivers of successful mergers and provi\u00addes an outlook on future M&A acti\u00advity in the industry.<\/strong><\/p>\n

Features of the fashion industry<\/strong><\/p>\n

The fact that the fashion indus\u00adtry is an indus\u00adtrial segment with signi\u00adfi\u00adcant shares in world trade is due to the fact that it serves the basic human need for clot\u00adhing. At the same time, the indus\u00adtry is also deve\u00adlo\u00adping luxury products desi\u00adgned exclu\u00adsi\u00advely for afflu\u00adent consu\u00admer groups. The luxury indus\u00adtry has bene\u00adfi\u00adted prima\u00adrily from a sharp increase in sales volu\u00admes in recent deca\u00addes, supported by the rise of the BRIC (Brazil, Russia, India and China) nati\u00adons and other emer\u00adging markets in Eastern Europe and Southe\u00adast Asia. This has also led to a strong conso\u00adli\u00adda\u00adtion of the market with the four Euro\u00adpean groups LVMH, PPR, Riche\u00admont and Swatch Group curr\u00adently domi\u00adna\u00adting the inter\u00adna\u00adtio\u00adnal luxury industry.<\/p>\n

Nevert\u00adhel\u00adess, the lower and mid-price segments of the fashion market have also shown strong growth of 5% (CAGR) in the first decade of the 21st century. Although conso\u00adli\u00adda\u00adtion was not as strong as in the luxury segment, fashion groups such as Phil\u00adipps-Van Heusen, VF Corp and Warnaco Group were able to assert them\u00adsel\u00adves through a strong brand stra\u00adtegy and with their busi\u00adness models, estab\u00adli\u00adshing large multi-brand fashion compa\u00adnies. In addi\u00adtion to these fashion conglo\u00adme\u00adra\u00adtes, which mostly origi\u00adnate from North America, there are also some Euro\u00adpean compa\u00adnies with high market shares, such as Adidas, Indi\u00adtex and Hennes & Mauritz. Despite large sales volu\u00admes and strong growth pros\u00adpects, there has not yet been a compre\u00adhen\u00adsive study of merger succes\u00adses in this parti\u00adcu\u00adlar indus\u00adtry segment. In view of the inher\u00adent idio\u00adsyn\u00adcra\u00adtic risk based on a busi\u00adness model with two to four chan\u00adging coll\u00adec\u00adtions per year, an inde\u00adpen\u00addent analy\u00adsis of the fashion indus\u00adtry is wort\u00adhwhile. Thus, M&A acti\u00advity in this context also seems to depend largely on fashion compa\u00adnies\u2019 efforts to diver\u00adsify these idio\u00adsyn\u00adcra\u00adtic risks by acqui\u00adring compa\u00adnies hori\u00adzon\u00adtally, ther\u00adeby stabi\u00adli\u00adzing free cash flows over time.<\/p>\n","protected":false},"featured_media":41353,"comment_status":"open","ping_status":"closed","template":"","meta":{"wp_typography_post_enhancements_disabled":false},"product_brand":[],"product_cat":[2452,2604,2622,2623],"product_tag":[2164,2222,2230,2236,2242,2249,2253],"class_list":{"0":"post-44276","1":"product","2":"type-product","3":"status-publish","4":"has-post-thumbnail","6":"product_cat-ebook-en","7":"product_cat-fyb-2013-en","8":"product_cat-prof-dr-dirk-schiereck-en","9":"product_cat-dr-steffen-meinshausen-en","10":"product_tag-joerg-en","11":"product_tag-schiereck-en","12":"product_tag-meinshausen-en","13":"product_tag-steffen-en","14":"product_tag-fashion-industry","15":"product_tag-corporate-finance-en-2","16":"product_tag-idiosyncratic-risk","17":"pa_sprache-english-3","18":"pa_sprache-german","20":"first","21":"outofstock","22":"taxable","23":"shipping-taxable","24":"purchasable","25":"product-type-variable"},"yoast_head":"\nShort- and long-term analysis of merger success in the fashion industry - FYB Financial Yearbook<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Short- and long-term analysis of merger success in the fashion industry - FYB Financial Yearbook\" \/>\n<meta property=\"og:description\" content=\"The fashion industry accounts for more than $500 billion, or more than 4%, of the world's annual trade volumes, underscoring its great importance to global commerce. Moreover, the industry has also seen a large number of mergers over the past decades; however, these have not been the subject of recent empirical studies in corporate finance research. The objective of this paper is to shed light on the short- and long-term, as well as capital market- and accounting-based performance of M&A transactions in the international fashion and leather accessories industry from 1994 to 2007. It also analyzes the key drivers of successful mergers and provides an outlook on future M&A activity in the industry. Features of the fashion industry The fact that the fashion industry is an industrial segment with significant shares in world trade is due to the fact that it serves the basic human need for clothing. At the same time, the industry is also developing luxury products designed exclusively for affluent consumer groups. The luxury industry has benefited primarily from a sharp increase in sales volumes in recent decades, supported by the rise of the BRIC (Brazil, Russia, India and China) nations and other emerging markets in Eastern Europe and Southeast Asia. This has also led to a strong consolidation of the market with the four European groups LVMH, PPR, Richemont and Swatch Group currently dominating the international luxury industry. Nevertheless, the lower and mid-price segments of the fashion market have also shown strong growth of 5% (CAGR) in the first decade of the 21st century. Although consolidation was not as strong as in the luxury segment, fashion groups such as Philipps-Van Heusen, VF Corp and Warnaco Group were able to assert themselves through a strong brand strategy and with their business models, establishing large multi-brand fashion companies. In addition to these fashion conglomerates, which mostly originate from North America, there are also some European companies with high market shares, such as Adidas, Inditex and Hennes & Mauritz. Despite large sales volumes and strong growth prospects, there has not yet been a comprehensive study of merger successes in this particular industry segment. In view of the inherent idiosyncratic risk based on a business model with two to four changing collections per year, an independent analysis of the fashion industry is worthwhile. Thus, M&A activity in this context also seems to depend largely on fashion companies' efforts to diversify these idiosyncratic risks by acquiring companies horizontally, thereby stabilizing free cash flows over time.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/\" \/>\n<meta property=\"og:site_name\" content=\"FYB Financial Yearbook\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Schiereck.png\" \/>\n\t<meta property=\"og:image:width\" content=\"334\" \/>\n\t<meta property=\"og:image:height\" content=\"298\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/\",\"url\":\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/\",\"name\":\"Short- and long-term analysis of merger success in the fashion industry - FYB Financial Yearbook\",\"isPartOf\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Schiereck.png\",\"datePublished\":\"2017-08-01T02:04:36+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/#primaryimage\",\"url\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Schiereck.png\",\"contentUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Schiereck.png\",\"width\":334,\"height\":298},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.fyb.de\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"FYB Shop\",\"item\":\"https:\/\/www.fyb.de\/en\/shop\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Short- and long-term analysis of merger success in the fashion industry\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.fyb.de\/en\/#website\",\"url\":\"https:\/\/www.fyb.de\/en\/\",\"name\":\"FYB Financial Yearbook\",\"description\":\"For Your Business\",\"publisher\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.fyb.de\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.fyb.de\/en\/#organization\",\"name\":\"FYB Financial Yearbook\",\"url\":\"https:\/\/www.fyb.de\/en\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg\",\"contentUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg\",\"caption\":\"FYB Financial Yearbook\"},\"image\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Short- and long-term analysis of merger success in the fashion industry - FYB Financial Yearbook","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.fyb.de\/en\/produkt\/short-and-long-term-analysis-of-merger-success-in-the-fashion-industry\/","og_locale":"en_US","og_type":"article","og_title":"Short- and long-term analysis of merger success in the fashion industry - FYB Financial Yearbook","og_description":"The fashion industry accounts for more than $500 billion, or more than 4%, of the world's annual trade volumes, underscoring its great importance to global commerce. 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