Consumer M&A: Examining Challenges and Insights in Today's Market

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May 06, 2024, 14:42 ET

The BGL Consumer Insider: Global Supply Chains and Channel Sentiment

CHICAGO, May 6, 2024 /PRNewswire/ -- Investor sentiment related to global supply chain risk and channel optimization has recently shifted. Growing geopolitical tensions between the U.S. and China and significant underperformance by high profile eCommerce businesses have caused investors to rethink how they evaluate and ascribe value to investment opportunities, according to an industry report released by the Consumer investment banking team from Brown Gibbons Lang & Company (BGL).

Investor sentiment related to global supply chain risk and channel optimization has recently shifted. Growing geopolitical tensions between the U.S. and China and significant underperformance by high profile eCommerce businesses have caused investors to rethink how they evaluate and ascribe value to investment opportunities, according to an industry report released by the Consumer investment banking team from Brown Gibbons Lang & Company (BGL).

Download and read the BGL Consumer Insider – Global Supply Chains and Channel Sentiment: https://bit.ly/bglConsumerInsider

The uncertainty surrounding the future of U.S.-China economic relations, fueled by potential conflict related to Taiwan and the rhetoric of U.S. presidential candidates, has intensified investor concerns. In response, consumer businesses should be actively pursuing a dual-sourcing strategy or consider completely exiting their relationships with Chinese suppliers.

Key highlights include:

Why large U.S. retailers are requiring vendors to develop product sourcing strategies outside of China
How many investors view sole sourcing from China as a massive value detractor with some firms refusing to invest in businesses that rely on China for products
What consumer businesses should actively be working towards amid supply chain challenges with China
Which countries present meaningful alternatives to China
How investor sentiment will continue to impact overall M&A activity in the Consumer sector
Why digital commerce continues to drive economic growth and brand value
What key fundamental is the best predictor of successful investment activity

The Consumer sector has undergone significant disruptive transformation in recent years, driven by the rise of eCommerce and the accelerated adoption of digital platforms during the pandemic. As brick-and-mortar businesses faced unprecedented challenges due to lockdowns and COVID-19 fears, investors sought refuge in eCommerce assets. However, the outcomes varied greatly, with some investments proving successful while others fell short. The key differentiator lies in the underlying business fundamentals.

The return of growth in eCommerce sales will help dispel any doubts about eCommerce as a viable channel for businesses moving forward.

BGL's Branded Consumer Products investment banking team has extensive expertise and a track record of successfully assisting branded consumer companies achieve outstanding results across a range of subsectors. Our Consumer Group is a leader in eCommerce investment banking for the middle market. Our team has the technical expertise, positioning strategies, and growth-oriented projection models to ensure branded and managed marketplace DTC & B2B eCommerce platforms are optimally positioned to achieve outlier valuations.

About Brown Gibbons Lang & Company
Brown Gibbons Lang & Company (BGL) is a leading independent investment bank and financial advisory firm focused on the global middle market. The firm advises private and public corporations and private equity groups on mergers and acquisitions, capital markets, financial restructurings, business valuations and opinions, and other strategic matters. BGL has investment banking offices in Chicago, Cleveland, Los Angeles, and New York, and real estate offices in Chicago, Cleveland, and San Antonio. The firm is also a founding member of Global M&A Partners, enabling BGL to service clients in more than 35 countries around the world. Securities transactions are conducted through Brown, Gibbons, Lang & Company Securities, LLC, an affiliate of Brown Gibbons Lang & Company LLC and a registered broker-dealer and member of FINRA and SIPC. For more information, please visit www.bglco.com.