From Prada’s headline-grabbing purchase of Versace to e.l.f. Beauty’s $1bn bet on Rhode, 2025 reshaped dealmaking across fashion and beauty, with momentum poised to carry into 2026. For brand operators, investors and strategics, the message is clear: scale, supply chain resilience and digital and AI capabilities are no longer differentiators. They are table stakes, directly influencing valuation, deal structure and long-term viability.
Amid post-pandemic recovery, rapid digital adoption and shifting consumer behaviour, dealmaking centred on two priorities: platform consolidation to drive efficiency and acquisitions that unlock innovation. A sharper focus on operational risk, including supply chain dynamics, regulation and geopolitical factors, reframed diligence and integration. Tech-driven deals such as Browzwear–Lalaland.ai and Perfect Corp.–Wannaby underscored growing demand for platforms that boost engagement, reduce development costs and accelerate product cycles.
Overall, 2025 clarified where premiums will be paid: tech-enabled, culturally resonant and operationally scalable brands. Expect ongoing competition for Gen Z-focused assets, increased emphasis on affordable luxury and continued portfolio optimisation in 2026.
Three key themes emerged during the year:
- Gen Z and social media as value drivers – Social native relevance materially shapes valuation and brand velocity.
- Affordable luxury momentum – Buyers favour high-value, margin-positive brands with accessible price points and strong cultural traction.
- Brand optimisation, resource efficiency and strategic resilience – Buyers prioritise assets that strengthen operational efficiency, supply chain control, sustainability and scale.
Major deals of 2025
The major deals shaping 2025 included:
Prada’s acquisition of Versace for €1.25bn – Prada acquired Versace in a €1.25bn transaction, bringing together two Italian luxury houses with distinct yet complementary aesthetics. The deal reframes Versace’s valuation relative to its 2018 sale and expands Prada’s exposure to younger, fashion-forward consumers.
This deal matters because it:
- Adds a globally influential brand that remains culturally relevant even as the industry emphasises ‘quiet luxury’;
- Unlocks operational synergies through integration into Prada’s vertically-integrated Italian manufacturing platform; and
- Enhances scale, cost efficiency and supply chain resilience across the combined platform.
Key takeaways:
- Continued consolidation in luxury as groups broaden consumer reach and price points.
- Reinforced the strategic value of manufacturing control, efficiency and sustainability in M&A.
- Demonstrates how acquirers are using M&A to optimise operating platforms and margins, as well as acquiring brands.
Caleres’ acquisition of Stuart Weitzman for $105m – Caleres acquired the Stuart Weitzman brand from Tapestry for approximately $105m, adding a heritage, design-led footwear brand with strong cultural cachet to its portfolio. The acquisition complements Caleres’ existing brands while expanding its presence in premium women’s footwear.
The deal matters because it:
- Strengthens Caleres’ premium portfolio with a globally recognised brand tied to celebrity and pop-culture relevance;
- Creates meaningful synergy opportunities across distribution, logistics, media buying and back-office functions beginning in 2026;
- Supports Caleres’ strategy to scale premium offerings and expand direct-to-consumer channels; and
- Allows Tapestry to sharpen its focus on core brands and reallocate capital more efficiently.
Key takeaways:
- Continued consolidation in footwear around scaled, operationally efficient platforms.
- Demonstrates how acquirers are repositioning heritage luxury brands to drive price-accessible growth.
- Shows M&A increasingly focused on operational optimisation, using existing infrastructure and platform leverage to turn premium brands into scalable, profitable assets.
e.l.f. Beauty’s acquisition of Rhode for $1bn – e.l.f. Beauty acquired Rhode, the fast-growing beauty brand founded by Hailey Bieber, in a $1bn transaction comprising $800m at closing and a $200m earnout tied to performance. The deal adds a culturally resonant, digitally native brand to e.l.f.’s portfolio.
This deal matters because it:
- Aligns two value‑driven brands focused on affordability, authenticity and prestige‑quality products in the ‘affordable prestige’ segment;
- Accelerates Rhode’s growth by leveraging e.l.f.’s scale, supply chain expertise and retail relationships;
- Enables expansion beyond direct-to-consumer, including Rhode’s launch in Sephora; and
- Strengthens e.l.f.’s relevance with Gen Z consumers through a creator-led, social-first brand.
Key takeaways:
- Gen Z is a primary value driver in beauty M&A, where brand equity is built through cultural relevance and social platforms.
- Reinforces the momentum behind affordable prestige and price-accessible growth.
- Demonstrates how platform scale and portfolio optimisation can unlock outsized growth for digitally native brands.
- Signals continued strong demand for social-first, Gen Z-native brands as premium M&A targets.
Looking ahead to 2026 M&A activity in fashion, apparel and beauty
These major 2025 transactions signal a clear direction for 2026. Buyers are prioritising cultural relevance, price accessibility, platform efficiency and technology-enabled scale.
Three themes will shape dealmaking in the year ahead.
- Gen Z’s $360bn in spending power and social-first behaviour continue to redefine discovery, loyalty and brand velocity. Creator-led influence often outperforms traditional advertising, making cultural relevance and social native traction critical valuation drivers. Deals like e.l.f.–Rhode show buyers are willing to pay premiums for brands embedded in Gen Z ecosystems. Implication: In 2026, buyers will target brands with authentic creator networks, strong social engagement and proven resonance with Gen Z.
- Evolving macro conditions and shifting expectations have accelerated demand for products that deliver premium aesthetics at accessible prices. Social media amplifies this trend by accelerating cycles and elevating high-value, mid-priced brands. Implication: In 2026, expect continued activity between premium and mass-market players as brands broaden reach, reposition offerings and use accessibility as a growth lever while maintaining brand equity.
- Scale and operational resilience are increasingly essential. Buyers are consolidating brands onto shared platforms with unified manufacturing, distribution, technology and back-office infrastructure. Recent integrations, such as Prada’s use of its Italian manufacturing system, highlight the focus on cost control, sustainability and supply chain strength. Implication: In 2026, M&A will emphasise platform optimisation and tech-driven capabilities like AI-assisted design, virtual try-on, demand forecasting and transparency, that mitigate risk and speed product cycles.
The 2025 M&A activity highlights an industry adapting quickly to cultural, technological and economic change. As fashion, apparel and beauty companies recalibrate to Gen Z consumers, price-accessible growth and operational resilience will require both organic and inorganic strategies to be more precise and intentional.
Trevor Mullin is a business law associate based in Foley & Lardner’s Los Angeles office. He is a member of the transactions practice group and supports clients in equity and debt financings, mergers and acquisitions, corporate formations and governance, and securities law compliance. He can be reached at [email protected].
Jackson ‘Jax’ England is an Associate in Foley’s business law department and a member of the firm’s transactions practice group. He brings a strong foundation in corporate law, transactional work and entrepreneurial legal support. He can be reached at [email protected].
Sarah McGrath is an associate in Foley’s business law department and a member of the transactions practice group. She supports clients in a variety of corporate matters, including start-up formation, mergers and acquisitions, and nonprofit structuring. She can be reached at [email protected].
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