The Top 50: Do Acquisitions Hurt the Industry?
As we were preparing our Top Distributors issue, news broke of four major industry shakeups. In the span of two weeks, Ennis announced plans to sell off Alstyle Apparel to an undisclosed buyer (later revealed to be Gildan Activewear), Hanesbrands Inc. acquired Champion Europe and Pacific Brands Limited, Taylor Corp. bought Staples Print Solutions, and private equity firm Audax Management Company purchased HALO Branded Solutions.
Those are some of the largest companies in the industry. Staples Promotional Products, sister company to Staples Print Solutions, is one of the honorable mentions on the Top 50 Distributors list. HALO Branded Solutions comes in at No. 5.
Many companies on this year’s list tell a similar story. Brand Addition acquired Gateway CDI—ranked No. 44 on last year’s list—this past January. Staples Promotional Products bought out Accolade Promotion Group, ranked No. 20, in April 2015. A Brand Company acquired three businesses—BrandAlliance, Design Accessories and Performance Link—in 2015. And before announcing its recent private equity deal, HALO Branded Solutions acquired Newton Manufacturing Company and Harvey-Daco.
Those deals, while big, represent a small sample of the whole picture. They don’t include the mergers and closures of smaller distributors, nor do they factor in all the acquisitions and investments happening on the supplier side.
Whenever the “A” word comes up, it sparks a flurry of conversation. Some distributors fear the consolidations and worry about their abilities to compete with these mammoth operations. Others are excited and want nothing more than to see a purchase offer come across their doorsteps. People on either side of the fence say, “What does it mean?”
This is my 10th year covering the promotional products world. What I’ve seen in that time is that the big guys are getting bigger: Not counting the recession years, sales volume for the top 50 companies has steadily increased. But I also have seen new companies, many founded by veterans of mergers, opening as often as I see others closing down. And no matter how many dire predictions I hear, I still see the same people—sometimes working for different companies—at events year after year.
Do acquisitions hurt the industry? I don’t know, and I wouldn’t trust anyone who said they do. What I can say with certainty is that the industry is changing. The companies on this year’s Top Distributors list have shown that they’re ready to adapt to those changes. Are you?