Target Information

On June 13, 2023, Size Factory, the leading brand in France for men's plus-size fashion, announced its acquisition of Capel, a historic and premium player in the same sector. This acquisition follows a shift in Size Factory's ownership six months prior and is supported by LBO France. The newly formed group, Capel-Size Factory, aims to leverage the complementary expertise of both brands, which are committed to inclusive and responsible ready-to-wear fashion. The ultimate goal is to establish the new entity as the leading reference in the European market for men's plus-size clothing.

The men's fashion sector has frequently overlooked tall and larger men, making it difficult for them to find well-fitting clothing at traditional retail chains. As a result, these consumers are increasingly turning to specialized retailers. Size Factory and Capel stand as the two main brands in France dedicated exclusively to catering to tall and larger men. They offer clothing with proper fits and sizes, ranging from 2XL to 10XL, and accommodating heights up to 2.20 meters. This inclusivity enables an often marginalized group in the fashion market to dress well.

Industry Overview

In France, the plus-size fashion industry has shown significant growth potential, as awareness of body diversity continues to rise. Consumers are becoming increasingly vocal about the need for sizes that cater to all body types, leading to a growing demand for brands that prioritize inclusivity. This shift indicates a change in shopping habits, where specialized retailers are filling the gap left by traditional brands, which have historically neglected this demographic.

Moreover, sustainability is gaining traction in the fashion industry, with brands expected to adopt ethical practices in their production processes. This includes responsible sourcing of materials, ethical labor practices, and minimal environmental impact. In this context, both Size Factory and Capel have committed to such value-driven approaches, illustrating their alignment with current trends toward sustainability.

With the added momentum from social media campaigns promoting body positivity and inclusivity, companies like Size Factory and Capel are well-positioned to capitalize on this expanding market. They can reach a wider consumer base, as men now seek fashionable, well-fitting clothing that respects their unique body shapes.

Rationale Behind the Deal

The acquisition of Capel by Size Factory marks a significant step in the strategic development plan established with LBO France. By creating the Capel-Size Factory group, the two brands can consolidate their market positions and amplify their reach. This acquisition is fully financed by Zencap and aligns with the impact financing strategy initiated during the LBO undertaken in December 2022.

The new entity not only prioritizes growth but also aims to fulfill Environmental, Social, and Governance (ESG) objectives set in collaboration with management and LBO France. These efforts will support the group's commitment to responsible fashion while also enhancing profitability, thereby bolstering its competitive edge in the market.

Investor Information

LBO France is a pioneer in private equity in France and has evolved into a reference multi-specialist investment platform active across various sectors, including Private Equity, Real Estate, and Venture Capital. The firm has expanded its operations in Europe and Africa, actively investing in initiatives that promote climate responsibility and gender equity in finance.

With its extensive experience and proven track record, LBO France plans to accompany Capel-Size Factory on its ambitious growth trajectory. By providing financial backing and strategic guidance, LBO France seeks to redefine the ready-to-wear landscape through more responsible and inclusive practices.

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This acquisition appears to be a well-calibrated move for both Size Factory and Capel. By merging their expertise and complementary strengths, they are poised to dominate a niche yet expanding segment of the fashion market that demands inclusivity and quality. The formation of the Capel-Size Factory group not only enhances their product offerings but also amplifies their market presence across Europe.

Capel's strong brand heritage coupled with Size Factory's innovative retail approach creates a formidable partnership that can effectively respond to changing consumer demands. Additionally, with LBO France’s support and a clear focus on ESG objectives, the group is well-positioned to attract a loyal customer base while appealing to ethically-minded consumers.

From a long-term investment perspective, this move could yield significant returns given the growing awareness and demand within the plus-size fashion market. Capel-Size Factory's commitment to sustainable practices can also enhance its brand value, setting it apart from competitors in an increasingly crowded market.

In conclusion, the Capel-Size Factory merger is strategically sound and aligns well with current market trends. By addressing the needs of often-overlooked consumers, it holds promise for robust growth and could emerge as a leading name in both French and European fashion for men who demand quality and fit.

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