Private Equity Trends in US Fashion: What Brands Need to Know for 2026

At a glance:

• Economic and trade volatility are steering more fashion brands toward PE — expect continued momentum in 2026.
• Scaled shared services can reduce landed costs and fuel artificial intelligence (AI)-enabled growth.
• Brand identity and long-term creative control remain top concerns.

Private equity activity is picking up in the US fashion sector as economic volatility creates opportunities for dealmakers. Continued interest in 2026 is expected as tariff exposure, traceability obligations, and logistics costs remain elevated.

PE interest is especially strong in mid-sized apparel and accessories brands with established retailer relationships and brand equity — segments where scale synergies and shared services can create immediate margin and working‑capital gains.

Supply-Chain Costs and Scale Drive PE Deal Activity

Last year saw a range of PE deals as tariff uncertainty caused the cost of worldwide imports — particularly those from China — to skyrocket and new trade agreements threatened to heighten compliance obligations for sourcing, transshipment, and export controls. Both factors made it challenging for independent houses to operate profitably, opening the door for private equity.

PE’s advantages stem in part from scale. Sponsors often aggregate multiple brands and centralize procurement, manufacturing, and logistics across global vendor networks. That scale can secure:

• Better terms with manufacturers and raw material suppliers.
• Preferential freight and port-handling rates, multi-node 3PL capacity, and improved on-time performance.
• Shared compliance, testing, and audit capabilities to meet retailer and regulatory requirements.

For independent and founder-led labels, access to these back-end advantages can translate into lower cost of goods sold, faster in-season replenishment, and improved full-price sell-through.

Key PE Considerations for Fashion Brands, From Technology to Brand Identity

The benefits of PE partnership go beyond bulk discounts or partnerships with logistics providers. More broadly, PE backing can help small-to-medium brands reach the next level, whether by increasing profit margins, expanding into new regions and customer markets, or launching new product lines to diversify their offerings. 

Outside investment can be particularly important when it comes to competitive technology. As AI applications grow across functions, from customer service, inventory optimization, and demand forecasting to generative marketing content and even design ideation, PE backing can fund enterprise‑grade platforms — systems often unaffordable for independent brands.

While most brands welcome PE leadership on the back end — manufacturing, supply-chain management, distribution, and cost optimization — founders often express concern about losing creative control and brand identity. Key questions frequently arise: What will our brand look like in five or 10 years? Will we still have a meaningful voice in its direction?

Therefore, companies evaluating PE investment must carefully consider their long-term vision and brand authenticity. Friction can emerge when an investor seeks deeper involvement on design, marketing decisions, or assortment strategies for key retail partners. This is often when brand leaders question whether the partnership could diminish their brand’s uniqueness or if integration into a PE portfolio might dilute the creative spark that made it valuable.

Picking the Right PE Partner

Vetting the sponsor is as important as negotiating the term sheet. Ask:

• Does the investor have proven fashion/retail operating experience and relevant advisors?
• How does the portfolio align with the brand by price point, channel, and consumer segment—and what guardrails prevent channel conflict?
• What resources, operational and creative, are available to support meaningful growth, and who leads them day-to-day?
• How are brand-protection and creative approvals handled across other portfolio brands?
• What is the sponsor’s likely hold period and exit path, including PE‑to‑PE? How will change‑of‑control be handled to preserve brand integrity?

PE-to-PE Transactions and New Trends for 2026

As fashion brands look to the year ahead, they should keep in mind another trend shaping the deal landscape: PE-to-PE transactions, or when firms buy and sell companies to one another.

For example, a PE buyer might acquire a distressed or underperforming brand at an attractive valuation and attempt a turnaround over several years before determining the brand is better suited for a different type of owner. The company is then returned to market, where another PE firm — often with a different thesis or operational model (e.g., a focus on growth versus value, or on direct-to-consumer channels versus wholesale partnerships) —steps in with the belief that it can unlock value. These “exit-to-purchase” transactions are increasingly common as consumer demand shifts, tariffs and production costs rise, and retailers adjust buying strategies.

For brands, this environment means that a PE deal may not be a single, long-term match but part of a broader lifecycle of evolving ownership. That’s why it’s important to understand not only the first investor’s capabilities but also how the brand could be positioned for future sales. A well-negotiated agreement can create stability during these transitions, ensuring that creative control, distribution strategy, and brand integrity remain protected even if ownership changes hands.

Bottom Line

Whether the goal is a back-end efficiency boost or turbocharged growth into new markets, with the right partner and documented guardrails, founders can capture scale and tech advantages while preserving the creative authority that maintains brand differentiation in today’s increasingly crowded market. However, it’s important that brands carefully assess potential PE opportunities for alignment with their long-term vision and brand identity.