Multi-billion-dollar mergers and hotly contested takeovers have been among retail’s biggest headlines throughout the past 20 years. As the industry has transformed from one dominated by department stores and brick-and-mortar chains to a more fragmented, digitally driven ecosystem, consolidation has been a consistent trend. In some cases, these deals have further bolstered the influence of retail’s most powerful companies, while in others, they’ve been a step toward bankruptcy.
Read on for seven of the most impactful, controversial and newsworthy retail M&A deals of the 2000s and 2010s:
2005: Kmart buys Sears in $11 billion deal
When Kmart Holding Co. boss Eddie Lampert scooped up Sears, Roebuck & Co. fifteen years ago, the acquisition created the country’s third-largest retailer. At the time, Sears Holdings Corp. had $55 billion in annual sales and around 3,500 stores — a number that has since dwindled to less than 100, according to the Sears and Kmart websites. While Lampert made good on his promise to cut costs, those decisions came at the expense of digital transformation, store upkeep and customer satisfaction. Sears’ real estate assets — once touted as the struggling chain’s saving grace — were marked down significantly as the financial crisis battered malls, and big-box competitors like Target and Home Depot steadily nabbed customers away. In October 2019, the once-iconic retailer filed for bankruptcy, and today, its future is uncertain.
2009: Amazon acquires Zappos for $1.2 billion
Amazon was already an e-commerce giant when it struck an all-share deal to buy Zappos more than a decade ago, but it still chose not to swallow the online footwear and apparel retailer whole when it came under its wing. Instead, Amazon CEO Jeff Bezos granted Zappos co-founder and then-CEO Tony Hsieh relative independence to continue to cultivate Zappos’ unique company culture. As FN wrote in 2019, the retailer has, since its early days, “functioned as something of an incubator for testing theories about corporate culture and productivity” — an identity that’s held strong despite the change in ownership. “We think of Amazon as a giant consulting company that we can hire if we want — for instance, if we need help redesigning our warehouse systems,” Hsieh wrote in a 2010 essay about why he sold the company. In August, he announced that he was stepping down after 21 years at the helm.
2015: Yoox and Net-A-Porter merge in an all-share deal
The battle for the online luxury customer has never been fiercer, with digital natives such as Farfetch, Matchesfashion, Luisaviaroma, Mytheresa and Ssense vying with department stores and specialty boutiques for high-spending clientele. Yoox Net-a-Porter Group was formed in part to better compete in this landscape, merging two top e-commerce retailers into a single force. “Together, we plan to expand on our many combined successes and industry breadth to strengthen partnerships with the world’s leading luxury brands and harness a significant untapped growth potential,” Federico Marchetti, Yoox Group founder and CEO said in a statement following the announcement. While Net-A-Porter founder Natalie Massenet resigned in the wake of the merger, her legacy as a pioneer of high-end online retail continues. In 2018, Compagnie Financière Richemont bought out all remaining shares in Yoox Net-a-Porter SpA for 2.69 billion euros, or about $3.3 billion, solidifying the Swiss group’s stake in the future of luxury e-commerce.
2016: Walmart buys Jet.com for $3.3 billion
Walmart’s acquisition of the then-one-year-old online marketplace Jet.com was widely understood as a bid to compete with e-commerce rival Amazon. While the Bentonville, Ark.-based company quietly shuttered the brand this year, its investment in its digital capabilities has paid off. In 2015, e-commerce accounted for just 3% of Walmart’s revenues — a share that has risen to more than 11% today, according to some analysts’ estimates. It has added digital offerings such as online grocery delivery, buy-online-pick-up-from-store (BOPIS) and two-hour delivery, and last quarter, its U.S. e-commerce sales nearly doubled. In a statement, Walmart said, “The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy.”
2017: Amazon acquires Whole Foods in a $13.7 billion deal
Amazon’s giant leap into grocery armed Whole Foods with new technology, drove Prime member loyalty (via discounts and delivery benefits) and pitted the e-commerce behemoth against Walmart on the latter’s home turf. The deal represented a major step into brick-and-mortar retail on Amazon’s part, and proved Bezos’ willingness to invest heavily in new categories — even ones with slim margins and well-established competition. This pattern is also evident now, as Amazon prepares to launch Luxury Stores, its high-end fashion platform, despite widespread declines in apparel sales and its own past missteps with fashion retail.
2018: Michael Kors scoops up Versace for $2.1 billion
The U.S. fashion industry may finally be on its way to having a homegrown luxury conglomerate (albeit one still much smaller than its European peers) following the $2.12 billion purchase of Gianni Versace SpA by Michael Kors Holdings Ltd. (now Capri Holdings Ltd.) in September 2018. Capri also added Jimmy Choo to its portfolio in 2017 for $1.2 billion, but its acquisition of the storied Italian brand gave the group new international cachet. Rival Tapestry has also expanded in recent years with the purchase of Stuart Weitzman for $547 million in 2015 and Kate Spade for $2.4 billion in 2017.
2019: LVMH strikes — and then pulls out of — deal to buy Tiffany & Co. for $16.2 billion
In November 2019, LVMH Moët Hennessy Louis Vuitton confirmed plans to buy the U.S. jeweler in what would be the largest deal ever in the luxury sector. Less than a year later, however, the French conglomerate announced it was backing out, citing trade disputes between the French government and the Trump administration as well as the “material adverse effect” of the COVID-19 pandemic on Tiffany & Co.’s business. In response, Tiffany has sued LVMH, and both parties are due in court in early January to hash out the disputed merger.