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Private Equity’s Role in Driving Retail’s Growth

By Brandon Anapol and Scott Benson

Via Chain Store Age

Retail isn’t going anywhere anytime soon. This past March, retail sales surged at the fastest rate since 2017. Riding this wave of good fortune, private equity firms have continued to invest in retail brands and, as a result, have helped them thrive in the evolving retail landscape we are experiencing today.

One of the main reasons private companies are investing in retail is because they view it as another growth vehicle with a substantial return on investment. These firms have the resources and experience to enable new and digitally-native retailers to progress more quickly than they would on their own. Likewise, national retail chains interested in expanding their footprint or innovating their brand can benefit from partnerships with private equity firms.

When investing in a retail brand, a private equity firm provides leadership, management, and structure that many young, undercapitalized companies may not possess. This consists of implementing systems and processes to streamline operations and create a more efficient workflow or overhauling an existing retail strategy altogether. These firms can also seamlessly bring in a retail strategist and highly-experienced C-suite talent with the know-how to scale and develop the business with quick decision-making.

For direct-to-consumer and digitally-native brands, private equity firms can help provide the necessary liquidity and capital to expand their presence through brick-and-mortar locations. Whether it be a pop-up, a freestanding store, or a space in a shopping center, growing the physical footprint of these retailers is critical to creating more brand awareness. Private equity firms also offer proven, successful methodology that is necessary for these brands to tighten up their supply chain, expand their workforce, refine payroll operations, and ultimately help them grab market share.

In addition, private equity firms help retailers access costly but key data that is specific to the brand’s retail sector or demographic. Brands who allow data to drive their physical retail strategy continue to be successful and better serve their customers. Executives at retail brands that hope to gain access to this information should consider an investment from a private equity firm.


eSite AnalyticsPrivate Equity’s Role in Driving Retail’s Growth

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