Shelf Life | Vol. 11: Deals in a Downturn - Why Retail M&A is Defying Gravity

🗓️ June 2025 | ✍️ By Jackie Swanson

Deals in a Downturn: Why Retail M&A Is Defying Gravity

How retailers and beauty brands are using M&A to reshape loyalty, CX, and future growth, even in an uncertain economy.

📉 High interest rates.

📉 Consumer caution.

📈 Retail and beauty deal-making? Still defying gravity.

In a market where wallets are tightening and macro clouds hang heavy, one corner of retail is moving at full tilt: M&A.

You’d expect caution. Instead, we’re seeing a race to relevance. Strategic players aren’t just buying growth, they’re acquiring cultural cachet, digital fluency, and future-proof business models.

Recent headline plays:

✨ Prada announced it will acquire Versace from Capri Holdings for $1.3B (April 10, 2025) -- a bold luxury consolidation play.

✨ e.l.f. Beauty took a minority stake in Hailey Bieber’s Rhode -- an instant Gen Z halo effect.

✨ Saks acquired Neiman Marcus Group in 2024, with Amazon as a backer -- a blockbuster U.S. luxury retail deal. But post-acquisition, mounting debt and brand tensions are raising new risks.

✨ Dick’s Sporting Goods announced it would acquire Foot Locker for $2.4bn -- aiming to build scale and resilience in the sporting goods market.

If "something bad” is happening with the economy, someone forgot to tell the dealmakers "dancing through life."

Why the Smart Money Is Moving Now

1️⃣ Speed > Certainty Building cultural relevance and digital-native audiences takes time. Buying it? Much faster.

🗣️ e.l.f. + Rhode = fast track to Gen Z skincare loyalty. 🗣️ Foot Locker + Dick’s = potential to scale omnichannel athletic retail and weather brand DTC shifts. 🗣️ Saks + Neiman = luxury scale play... though debt challenges now present challenges.

2️⃣ Category Lines Are Blurring The convergence is accelerating: beauty + wellness, luxury + experience, retail + media, athletic + lifestyle. M&A lets players leap lanes:

Prada + Versace? Global luxury scale and CX control. Puig’s IPO? War chest for beauty brand acquisitions.

3️⃣ Valuations Are Right-Sizing Gone are 2021’s sky-high multiples. For well-capitalized buyers, it’s a strategic window (especially in beauty, wellness, and lifestyle).

4️⃣ Bold Moves Are Being Rewarded Despite market caution, investors still reward credible growth stories. Categories like luxury, beauty, and premium wellness remain resilient. M&A is seen as a proactive strategy, not just risk-taking.

💡 What This Means for the Industry

📌 Luxury is consolidating → Will we see more Prada/Versace-style plays as U.S. and European players race to scale?

📌 Beauty M&A is accelerating → Will celebrity brands, wellness hybrids, and global scale deals become the path forward for beauty conglomerates?

📌 Omnichannel athletic is reshuffling → Is the Foot Locker/Dick’s merger just consolidation or is there more disruption to come for the athletic/athleisure world?

📌 Control over CX, data, and store ecosystems is paramount → Is a unified retail experience the common thread in Prada, Saks, and Dick’s strategies?

📌 Tech will underpin major deals → Does Amazon’s role in Saks signal how retail + tech capital will intersect going forward?

📌 M&A = strategic rewiring, not just defense → Are the best deals those that build next-gen ecosystems for loyalty, experience, and digital scale?

The Twist: M&A Isn’t About Patchwork Growth, It’s About Reinventing the Consumer Playbook

Here’s what many headlines miss: these deals aren’t just about survival. They’re about strategic transformation. The smartest retailers and beauty brands are using M&A to reinvent how they drive loyalty, build CX, and future-proof their revenue engines. At the heart of it, an acquisition says "as long as you're mine," we'll remain "for good."

In an era where consumer preferences shift faster than traditional cycles, standing still isn’t an option.

Debate question: In today’s market, is it faster to buy growth or to build it from within?

More to come in the Shelf Life series. Follow me here for sharp takes on the trends shaping retail, fashion, and consumer product companies. Want to talk more about how Gartner Consulting can help your organization? Follow me on LinkedIn or @ShelfLifebyJKS on Instagram or reach out!

📍 Jackie Swanson is a Managing Partner at Gartner Consulting, specializing in retail, consumer products, and utilities. She advises companies on large-scale transformations spanning strategy, operations, and technology. Jackie lives in New York with her husband and their three children.