When the broader M&A market cools, consumer goods (especially non-essential consumer goods, like fashion) are the first to feel the effects. After the initial torture of the first round of lockdowns, many brands got a big boost from consumers sitting at home with nothing to do but renovate their bathrooms and buy sweatpants. The stimulus checks helped further, and many started spending their extra money on sequined Zoom tops and satin platforms for weddings that were delayed at least three times. This boosted sales at fashion brands across the board, and in 2021 many were up 30, 40 percent from the Before Times—an incredible boon for the industry. 

There were a ton of brands on the market by 2022 (like Ganni and Khaite), and a ton of others that were of interest to acquirers (like Jacquemus and Ulla Johnson) even if they weren’t interested in selling. But then the deal heat ended. Private equity firms and V.C.s, which operate off of debt and leverage, wisely predicted that the Federal Reserve would raise interest rates, making borrowing more expensive, forcing them to pull back. When regulators in Washington followed through on their predictions, the broader capital markets quieted. This impacted every sector, but certainly fashion, too.