The European fashion brands market comprises businesses involved in the design, production, marketing and sale of fashion items, both directly (D2C) and indirectly (through third-party retailers) to end-consumers. Identified brands mostly sell both footwear and apparel, although we also identified a group of pure-play footwear brands. Accordingly, we segmented the European market of general fashion brands in line with players’ price positioning: (i) mass market, (ii) premium and (iii) luxury, while appending product-focused (iv) footwear segment.

The European landscape has an overall fragmented nature, with the market for luxury fashion being an exception. Specifically, the luxury sector is dominated by multinational conglomerates (e.g. Kering, LVMH), even despite the considerable presence of smaller independent brands. This is illustrated by the fact that the top-10 luxury brands account for >50% of global market sales. Across all identified verticals, synergistic benefits from e.g. centralised warehousing and administrative capabilities as well as a stark competitive landscape are expected to further drive consolidation.

Sponsors-led interest has been moderate, with >40% of identified European assets being backed by financial sponsors (April 2023). The main detractors for investors are the industry’s seasonality and cyclicality paired with the transactional nature of sales. On the upside, bottom-line margin improvements on the back of D2C sales, opportunities stemming from the usage of data analytics to predict consumer behaviour and stable long-term underlying demand for clothing are the main factors persuading sponsors to invest in fashion brands.

ESG topics mainly concern environmental and social matters. The fashion sector is one of the biggest emitters of greenhouse gases in the world with fast-fashion models being the norm (except for luxury brands), entailing overproduction, extended supply chains and low durability. In order to decrease their carbon footprint, brands need to lower product volume, extend their products’ lifecycle, improve sourcing processes and introduce second-hand offerings. From a social perspective, working conditions and employee safety in subcontractors’ facilities as well as fair buying practices are top of executives’ minds