Yesterday's announcement that Michael Kors would buy luxury shoe and accessories brand Jimmy Choo comes on the heels (heh, heh) of Coach's $2.4 billion deal to acquire Kate Spade. While this particular move is not in and of itself a catalyst for more merger & acquisition activity, there is a growing sense that various forces are converging to drive an acceleration in retail industry consolidation.
The biggest driver is the harsh reality that organic growth is getting harder and harder to come by. Most sectors of the luxury market have stalled and retailers across a spectrum of formats and price points are being confronted with the need to downsize their physical store footprints amidst retail overcapacity and a fundamental shift in consumer spending behavior. . . . more