BGL Consumer Insider – Consumer M&A: Examining Challenges and Insights in Today’s Market

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:

• Which U.S. retailers are requiring vendors to stop sourcing products from China
• How investors view China sourcing as a massive value detractor with certain 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

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