Article

Rise of online shopping sees winners and losers

Trefor Griffith Trefor Griffith

In the last year, the consumer sector has been impacted by a substantial shift in consumer behaviour and buying habits.

Spending has moved away from holidays and gym memberships, to home improvements and home exercise equipment. Many were forced to change where they spent their money as they weren’t going into offices and were unable or uncomfortable with shopping in store, when they were open.

A snapshot of our consumer deals in 2020

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Discover our key successes in the sector

Our consumer team focuses on three main areas:

1 Food and beverage (F&B)

2 Online retail

3 Travel, tourism and leisure

Our clients ranged from fast-growth businesses to large multinationals. Needless to say, each was individually impacted by the events of 2020, often in quite a polarised way.

Moving forward at a pace

During 2020, we saw an acceleration of certain existing trends, such as an increase in online shopping and a continued focus on health, wellbeing and sustainability. We expect these trends will continue through 2021 and beyond, and be a contributing factor in driving mergers and acquisitions activity as corporates and investors look to focus on growth areas.

Times of difficulty can often spark the creation or change of businesses in a positive way. And we've watched businesses demonstrate remarkable tenacity, resilience and even creativity. These characteristics will remain present, and we expect to see further consolidation as businesses re-organise themselves for a more long-term view of the so-called 'new normal'.

Looking ahead to 2021 in consumer deals

2020 was a busy year for us. We spent a significant amount of time advising F&B clients and brands selling into supermarkets and direct to consumers, as well as retail clients thriving from a significant increase in online sales. The shift in buying habits, driven by coronavirus, was instrumental in driving the performance of a number of these businesses and making them more attractive.

In addition, near the end of the year, there was a much-needed and long-overdue sense of certainty around Brexit. M&A activity in the F&B sector has been particularly affected for the last four and a half years, as the UK’s future relationship with the EU remained something of a mystery.

The impact of that uncertainty was not only on halting decisions in boardrooms, it also put the handbrake on overseas investors and buyers looking to invest in the UK. The recent clarity on our withdrawal and the new agreement for trade is welcome, and will embolden the sector.

With the vaccination program in place and, hopefully, a rapid return to some form of normality, we expect businesses to be able to focus more on future plans and growth opportunities, and our expectation is an increase in M&A activity for 2021, as well as the potential for higher valuations.

It's our expectation that in the next year and beyond, continued areas of growth in the sector will include:

  • digital and online
  • direct to consumer
  • health and wellbeing

This, coupled with the expectation of pent-up consumer desire to 'live life' after lockdown, and the positive impact this will have on the travel, tourism and leisure sector, gives us plenty of reason to look forward to the year ahead.

Further details about the projects that we worked on in 2020 can be found on our website, and we'd be delighted for you to contact us to hear more.

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Our key successes in the sector

October 2020

Hollings Limited

Sale to Assisi Pet Care, backed by Harwood Capital

Natural dog treats

October 2020

Fultons Foods

Sale to Poundland

Discount food retailer

August 2020

AK Retail Holdings Limited

Acquisition of Long Tall Sally Limited's trade and assets

Consumer retail

June 2020

Ted Baker PLC

Placing and Open Offer and Offer for Subscription

Global lifestyle brand and retailer

December 2020

David Berryman Holdings Limited

Sale to The Hut Group PLC

Food and beverage

December 2020

City Chic Collective Limited

Acquisition of the Evans brand, eCommerce and wholesale business from Arcadia Group

Consumer retail

January 2021

The Shareholders of Bramley and Gage Limited

Investment by Black Diamond Capital LLC

Premium gin brand distillery

December 2020

The Pebble Group PLC

AIM Admission

Provider of products, services and technology to the promotional products industry

December 2019

Cartesian Capital Group LLC

Investment in Simba Sleep Limited

Retailer of sleep products