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Overnight, there have been a number of statements (and speculation) about a number of deals in retail and consumer. Most are small and seemingly inconsequential. But looked at in aggregate, it supports our view that M&A activity in retail will pick up meaningfully in 2010.

  1. Delta Apparel buying Art Gun Technologies, a maker of technology needed to customize patterns and colors on garments.
  2. A SPAC is stepping up to buy Fashion Box, the owner of “Replay”, “We Are Replay” and “Replay & Sons” (no kidding) denim brands.
  3. Emerisque – who recently bought Hartmarx, said in a public statement that it is stepping up its acquisition efforts meaningfully – but apparently is subscribing to the Ackman-esque model (remember when he justified losing money on Target by saying that he uses a 50-year model?) and distancing itself from financial buyers that are now pained with the task of unloading similar deals that were done 3-4 years ago at peak margins and valuations.
  4. Also some non-retail deals worth noting

       a) Apollo buying Cedar Fair for $700mm.

       b) Boyd/Station
       c) Jarden broadens its portfolio of eclectic assets with the acquisition of Mapa Spontex.
       d) Sally Beauty Supplies buys Sinelco – a beauty supply distributor in Europe.

A notable trend is that since the Dollar General and Rue 21 deals, the IPO part of our ‘Banker Bonanza’ call has dried up. But the M&A portion appears to be picking up steam. The evolution into 2010 should be when both are humming simultaneously.