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Investors Scout Fashion Market For Smaller Brands

Investment bankers and private-equity funds are training their sights on designers who have the potential to be marketed and developed as global brands. Driving their interest is a shift from bigger "megadeals" to smaller-sized transactions.

Investors are eyeing companies with sales of between $2 million and $100 million that have the potential to grow. Those on the prospect list include Anna Sui, Catherine Malandrino, Hussein Chalayan and Phoebe Philo. Given recent turmoil in the credit markets, the pace of mergers and acquisitions activity has slowed. According to Dealogic, year-to-date M&A deal volume in the general retail sector is down 7.8% to $38 billion from $42.1 billion last year.

Theresia Gouw Ranzetta, general partner at venture capital firm Accel Partners, says there is also a "big trend" of investment in women-focused online content. The recent swoon coincides with investors' realizations that the bulk of ad dollars are targeted to women, and that marketers need new online outlets to grab women's attention outside the largely male-oriented content that now dominates the Web.



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