Michael Stanley is getting a fresh view of the style dealmaking scene and is able to dive in — even while the market is roiled by mismatched expectations between buyers and sellers, inflation and the specter of recession. 

And Stanley has greater than 25 years of close-up experience working with fashion brands to get a read on just when it’s time to take a buyout, merge or acquire. 

He’s a well-recognized face across the industry.  

Stanley joined Rosenthal & Rosenthal in 1998 and rose to managing director and head of the factoring division — keeping tabs on the health of shops, helping brands determine when it’s secure to work with stores and financing the shipment. 

It was a gig that gave him a deep and real-time understanding of the behind-the-scenes funds of brands across the style spectrum.  

Now, Stanley has transitioned to senior adviser at Rosenthal and is taking over a recent role, as vice chairman of William Susman’s advisory and investment firm Threadstone Capital. 

That lets him have a look at the industry through recent eyes — and maybe make some recent connections for longtime acquaintances. 

Stanley steps in at a time when there aren’t tons of deals happening, but there are many corporations struggling to match their funds with today’s consumer realities. 

He said there was an “enormous amount of uncertainty, even before this crazy banking crisis occurred” with the “very high rates of interest” the Federal Reserve is using to combat inflation. 

“It actually puts a burden on operations, money flow,” Stanley said. “The excellent news is that the transportation cost, that narrowed, but as that narrowed, rates of interest soared. It created a really tight credit market. Getting financing for corporations in a challenged position could also be far more difficult and it creates the deal market where there might be distressed opportunities on the market.”

On the flip side, he said there are corporations that did “extraordinarily well” through the pandemic and have “a variety of opportunities” to expand. 

“There are folks which can be seeking to buy. Why? Because if you happen to’re just standing still, you’re going backwards,” Stanley said. “You’ve to go forward. And what’s the best method to add on now to your platform? It’s to make an acquisition.”

Beauty brands are still commanding a premium while home goods corporations are most challenged now after a giant pandemic rush, Stanley said. 

Designer fashion and apparel has been a troublesome area for dealmaking, even for brands with buzzy names.

“Why do a few of these brands fail?” Stanley said. “It’s not that they don’t have momentum, but they don’t have the correct financial partner or the capital structure to push them forward.

“They really want to give attention to their financial capabilities,” he said. “What can they afford to do? How much inventory, how much volume can they tackle? They should have the latitude of a cushion because things occur, a supply chain problems, a banking problem…it’s not because they don’t have an order backlog. It’s because they simply ran out of cash and so they didn’t have the correct financing partner.”

Now, Stanley will help brands position themselves and connect in a recent way at Threadstone, which has advised greater than 150 corporations on deals with a complete value of greater than $5 billion over the past 12 years.  

Susman, who’s managing director at Threadsone, said Stanley can be a useful sounding board. 

“Michael is totally a relationship person,” Susman said. “I’m seeking to close every deal I can, but early in a process, I even have to determine, ‘Does this client actually need to shut a deal? Is that this anyone we wish to be doing business with? Is the moral compass pointed due north?’ 

“Michael may be very attuned to what our client needs,” he said. “What are their capabilities? What are they good at? What are their challenges? That sixth sense of really saying, ‘Gosh, XYZ, you’ve built a $500 million business. Let’s speak about you being a billion-dollar company.’ That sixth sense comes from a prioritization of relationship and a prioritization of putting clients first.”  

And that may be a conversation about growth many brands are little question wanting to have.