As per Deloitte’s latest Deal Monitor report, of the 265 mergers and acquisitions that took place in the luxury sector last year, many involved conglomerates who were seeking to diversify their holdings by buying companies in adjacent sectors. One of several luxury-focused companies expanding sideways is Fartech which recently announced a $675 million acquisition of New Guards Group, the Italian incubator of streetwear labels including Off-White and Palm Angels. The move will enable Farfetch to extend its proposition upstream by adding design, production and brand development to its capabilities.

LVMH recently forayed into the tourism sector with its $3.2 billion purchase of the Belmond hotel brand while Dubai-based property developer Damac acquired a controlling stake in Roberto Cavalli last month.

While fashion companies are investing in adjacent sectors, private equity investors are continuing to prioritise luxury fashion, despite the mixed success of such investments. For the third consecutive year, a Deloitte survey of 60 leading private equity firms noted that these were interested in investing in fashion even though they expect beauty, restaurants and digital luxury goods to grow twice as fast.