Janki Gandhi says her work advising entrepreneurs at middle-market companies, in some cases working a few years with them as they prepare their business for a deal, is extremely rewarding. For example, she says, she greatly admired the founders of Los Angeles-based Paige, formerly Paige Denim, which was launched in 2004 by Paige Adams-Geller, creative director; her husband Michael Geller, CEO; and Michael Henschel, chief financial officer.

Paige successfully evolved from a denim brand to a lifestyle brand, and Gandhi advised the company on its deal to sell a stake to TSG Consumer Partners in 2012. Another example: Serge Azria, an industry veteran who started building fashion brands under Dutch LLC of Vernon, California, including Joie, Current/Elliott and Equipment in 2007. Gandhi advised Dutch on its deal to sell 60 percent of the company to TA Associates in 2012 for $550 million. She calls Azria one of the strongest merchants she’s ever known, using his acute knowledge of product and consumers to build a highly profitable business.

Companies in the branded consumer space tend to attract higher acquisition prices because private equity investors are interested in distinctive assets that can be built into much bigger businesses, Gandhi says. Beauty M&A is a hot area now because brands are capitalizing on social media and digital channels for sales, and they can build both through mass-market stores like Target and upscale stores like Neiman Marcus. But in the branded apparel and accessories space, most of today’s M&A deals are restructurings instead of growth deals, partly because of a dearth of strategic buyers in the space.

“It’s hard for many private equity investors, who are saying: ‘OK; I can buy this business now; I think it’s a fantastic company, but who am I going to sell it to in three to five years?’”