The trade war launched by US President Donald Trump is driving mergers and acquisitions in the American clothing and footwear sector to record levels, with companies turning to consolidation or privatisation to offset escalating tariff costs, according to dealmakers.
Skechers, the popular sneaker brand, announced a US $ 9.42 billion deal in early May to go private, just days after it withdrew its annual earnings forecast. The company, alongside 75 other footwear makers, had warned the White House in a letter that tariffs posed an “existential threat” to the industry.
Meanwhile, sneaker retailer Foot Locker, another signatory to the letter, accelerated its US $ 2.4 billion sale to Dick’s Sporting Goods in May. Both deals had been in motion for months, but bankers and analysts said Trump’s tariffs had created both disruption and opportunity, fuelling tie-ups across the sector.
Year-to-date, US footwear and apparel M&A activity has reached roughly US $ 21 billion, according to LSEG data. With more than three months remaining in the year, the figure already surpasses the previous record of US $ 16.1 billion set in 2023. The sector has not seen valuations as high as in technology or finance, making the surge particularly notable.
Morgan Stanley recently advised Canadian apparel maker Gildan Activewear on its US $ 2.2 billion acquisition of US underwear maker Hanesbrands.
Both Gildan and Hanesbrands manufacture largely in Central America and the Caribbean, relying mostly on US-grown cotton. Their merger is designed to shield them from tariff exposure and geopolitical instability. “We think that we’re really well aligned to take advantage, actually, of this near-shoring opportunity,” said Gildan’s co-founder and chief executive Glenn Chamandy during an August investor call.
Tariffs, according to bankers, have served as a wake-up call to retailers about the fragility of supply chains and the importance of scale.
This year, JPMorgan advised 3G Capital on its Skechers deal, as well as Authentic Brands Group’s US $ 1.4 billion acquisition of Guess. Authentic also acquired Dockers from Levi Strauss, while Bluestar Alliance announced its purchase of Dickies from VF Corp earlier this week.
Privatisation has become increasingly attractive, as seen in Skechers’ move, enabling companies to navigate uncertainty without the burden of quarterly reporting, particularly when they feel undervalued by public markets.
Bankers expect further consolidation this year as stronger retailers seek acquisitions and struggling companies pursue lifelines. Private equity group Bain Capital is exploring the sale of its stake in Canada Goose, while Lands’ End has attracted offers from brand management firms.
