![]() ![]() DTC brands sometimes don't spend money in the wisest way,” Kondrat said. There’s a push from the acquirer, the SPAC, to gain efficiencies, which sometimes can mean budget cuts resulting in the brands needing to adapt the way they operate. “The brands are not getting what they thought they would get, which is, a capital infusion, yes, but additional support and additional resources - a lot of the brands that entered into those arrangements have been a little bit left out in the cold and are suffering the repercussions of that.” These type of deals “played out to the point where they've shown themselves to not be as valuable as brands maybe thought they would,” Rebekah Kondrat, founder of Rekon Retail, said. As of July this year, the number of SPAC deals has come down to 70. ![]() across sectors, up from 248 in 2020 and just 59 in 2019. In 2021, there were 613 SPAC IPOs in the U.S. ![]() Going public by way of special purpose acquisition companies rose in popularity last year. The market, however, is not only seeing a slowdown in traditional IPOs, but also a decline in de-SPAC transactions. Last year’s IPOs “have severely underperformed in the aftermarket, significantly impacting companies’ desires to go public as they navigate ongoing market volatility.” “What we need is stability in the market,” Rachel Gerring, IPO leader in EY Americas, said in a statement. Lingering uncertainty, which has caused retailers to slash their guidance for the quarters ahead, has wreaked havoc on the public markets.Īcross all sectors, IPOs have fallen 74% in the first nine months of this year compared to the same period in 2021 as a result of inflationary pressure, market volatility, surging interest rates, and risks from COVID-19 and Russia’s war on Ukraine, according to EY. So what’s behind the sharp decline in deals and what does it signal about the future of DTC exits? A different market And of those deals, a fraction involved digitally native companies. In 2022 so far, there have been just under 40 major retail deals, a roughly 50% decline from 2021’s year-end total. However, deal activity has slowed significantly since then. ![]()
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