Who needs a "Horizontal" or "Vertical" merger when diversification works just as well!

Yesterday saw perhaps one of the most unusual deals for some time announced, and certainly defies textbook logic of buyers carrying out horizontal or vertical mergers in order to gain cost and efficiency savings! Urban Outfitters, the US-based retailer of retro funky clothes and housewares, announced it was acquiring the Pizzeria Vetri chain of Italian restaurants established and run by chef Mark Vetri and restaurateur Jeff Benjamin.

On the face of it this does seem like a deal that doesn't quite bring obvious synergies to mind when thinking about the respective activities of both buyer and target. However it does fit with Urban Outfitters’ strategy of bringing a complete “lifestyle" experience to its customers. Having started out with fashionwear the chain now also offers footwear, beauty and accessories, active wear and gear, and houseware, and it is not uncommon to find well known chefs opening their restaurants within other larger established businesses - think hotels, airports and shopping malls!