Streetwear’s run of pandemic-era M&A deals shows no sign of slowing down.
End., the menswear retailer known for its curated mix of luxury streetwear and sports apparel, has nabbed itself a new partner: The Carlyle Group — the global investment firm that quietly helped Supreme scale from underground start-up to a streetwear juggernaut worth $2.1 billion.
The companies said Tuesday that Carlyle is set to acquire a majority stake in the Newcastle-based company for an undisclosed sum. The deal values End. at £750 million ($1 billion), according to a Bloomberg report. Carlyle declined to comment on the figure.
Co-founders Christiaan Ashworth and John Parker will retain a significant minority stake and remain co-CEOs. Investor Index Ventures, which bought a minority stake in the retailer for an undisclosed sum in 2014, will cash out.
The acquisition is the latest in a string of pandemic-era deals in the streetwear space. In November, Supreme was bought by VF Corp, one of the largest apparel groups in the world. Then outwear behemoth Moncler purchased Stone Island in a €1.2 billion ($1.4 billion) deal in December.
The End.-Carlyle deal further cements streetwear’s status as one of fashion’s most interesting investment propositions today. While some industry watchers were predicting the market had peaked before the pandemic, the past year of lockdowns has only furthered the category’s popularity amid a wider trend towards casualisation. M&A activity in the space over the last year suggests that investors see the broader streetwear space — and its intersection with the luxury sector — as resilient as ever.
“We area going through a secular shift to casual,” said Bernstein analyst Luca Solca. “Up until five [or] 10 years ago, it was almost impossible to find any brand focused on casual and high-end. High-end was formal, almost 100 percent.”
Today, End. sells the likes of Heron Preston and 1017 ALYX 9SM alongside luxury names like Gucci and Valentino and sports brands including Nike, Adidas and Patagonia — all desirable names, as sportswear and outdoor brands take pride of place in streetwear consumer wardrobes today. The retailer also partners with hot brands like Off-White to create exclusive, limited-edition capsule collections.
The retailer also appears well-positioned to reap the rewards of industry shifts over the pandemic, including consumer migration to e-commerce and the boom in comfort-driven, casual clothes. Over the past 15 years, it has garnered a loyal following for its curated assortment of sportswear, sneakers and emerging labels. And, while it operates three flagship stores in Newcastle, Glasgow and London, e-commerce drives the business, accounting for about 90 percent of sales.
Before the pandemic, End. was growing fast. For the year ending March 2020, the retailer generated revenues of £171 million, up 27 percent year-on-year. Profit for the financial year was £26 million, up 20 percent compared to a year earlier, according to public filings. While the company is yet to report numbers for the pandemic period, it has previously flagged good growth in online demand during the first phase of the crisis. By contrast, the broader menswear apparel market saw global sales decline 20 percent to $427 billion in 2020, according to Euromonitor International.
For Carlyle, End.’s distinct emphasis on the intersection of luxury, streetwear and sportswear is an attractive proposition, as is its robust sneaker business. Now, both parties are looking ahead to the next phase of growth for the retailer. Plans for scaling include dialling up the retailer’s international presence — 35 percent of End.’s sales still come from its home UK market — and branching into womenswear.
“We are excited by the many growth opportunities that lie ahead for the company,” Carlyle managing director Massimiliano Caraffa said.
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