PYMNTS MonitorEdge May 2024

Razor Group Acquires Perch, Consolidating Two Online Brand Aggregators

Razor Group has acquired Perch in a deal that consolidates two online brand aggregators.

Following this acquisition, Razor Group now operates a catalog of 40,000 products across three continents, in more than 10 countries and 30 channels, “paving the way for a [$1 billion] top-line business,” Tushar Ahluwalia, co-founder and CEO of Razor Group, said in a Monday (March 4) post on LinkedIn.

“Razor Group’s acquisition of Perch marks an inflection point for our industry and makes us the undisputable #1 player in our industry globally,” Ahluwalia said in the post.

This deal positions the combined entity at a valuation of $1.7 billion, Bloomberg reported Monday.

The acquisition also underscores the rapidly evolving nature of the aggregator space, especially in a post-pandemic world where many such companies have grappled with a sales slowdown, according to the report.

Razor Group and Perch both acquired top-performing brands that sold on Amazon during the pandemic and then found themselves at a critical juncture as the online shopping frenzy fueled by the pandemic began to cool, the report said.

The acquisition by Razor Group, a company backed by L Catterton — the private equity arm of Bernard Arnault, the world’s third wealthiest individual — signals a strategic consolidation amid challenging market conditions, per the report.

Perch, which had drawn investments from players like SoftBank Group and Victory Park Capital, had been under the microscope due to its $400 million in debt obligations, according to the report.

The Razor-Perch deal creates a portfolio that brings together 40,000 products spanning across categories like kitchen, fitness, beauty and apparel, featuring leading brands such as Baby Merlin’s Magic Sleepsuits, the report said.

The acquisition comes amid the backdrop of an industrywide shakeout, where about 100 aggregators had raised a staggering $16 billion in an ambitious bid to replicate the success stories like Anker Innovations Technology, but then encountered rising interest rates, higher costs and falling demand, per the report.

In another recent development in this space, an aggregator called Thrasio Holdings filed for bankruptcy in February. The company’s bankruptcy had been on the table as recently as late 2023.

In addition, Benitago Group filed for bankruptcy in 2023.