As consumer confidence and jobs are returning to the American landscape, the apparel world is abuzz with news of mergers and acquisitions.

Where even rumors of M&A used to cast a pall over day-to-day operations, today the business is mostly dominated by financially healthy retailers or private equity groups looking for unique ways to grow.

Take, for example, Nordstrom. The specialty department store is acquiring online retailer HauteLook, one of the early architects of private flash sales, in a $180 million deal that will give Nordstrom a new avenue to serve its customers.

"While our focus on providing a superior in-store shopping experience is our roots, continuing to find ways to use technology to serve customers the way they want to be served is critical," says Blake Nordstrom, president. "This partnership gives Nordstrom and HauteLook shared growth opportunities as online shopping evolves."

Apparel shoppers spend a significant amount of time shopping each month, more than one and a half hours both online and in-store, according to the Cotton Incorporated Lifestyle Monitor™ survey.

Retailers have been looking to capitalize on that, whether through e-commerce, slick mobile apps, or keen in-store operations. Even after suffering through the Great Recession, women still love shopping; 61% report they either "love" or "enjoy" clothes shopping. That enjoyment only stands to grow as jobs and consumer confidence return.

The Conference Board Consumer Confidence Index® rose to 70.4 in February, up from January's 64.8 measure. Employers hired in February at the fastest pace in almost a year, and the unemployment rate fell to 8.9%, a nearly two-year low. It was the third decline in the last four weeks, as the U.S. economy added a net 192,000 jobs.

"The depressed valuations held by many publicly-traded apparel retailers, their very good cash flow characteristics, strong balance sheets and attractive earnings leverage, coupled with the low interest-rate environment and a preponderance of highly liquid, private equity funds seeking investments creates a favorable environment for both buyers and sellers," wrote Stifel Nicolaus analyst Richard Jaffe in a note to investors.

Investment research firm Morningstar is predicting a significant uptick in "blockbuster" retail deals in 2011. So far, movements include:

• Shareholders recently approved J. Crew Group Inc.'s $2.86 billion buyout by TPG Capital and Leonard Green & Partners.
• In November 2010, Bain Capital bought out Gymboree for $1.8 billion.
• Courr�ges was purchased by two investors, Fr�d�ric Torloting and Jacques Bungert.
• Abercrombie, American Eagle Outfitters and Aeropostale are being eyed by private equity, according to Wall Street chatter. Abercrombie is looking to reincorporate in Ohio to better manage a possible acquisition process, though bidding has yet taken place. American Eagle has a debt-free balance sheet and strong cash flow, according to a Morningstar report.
• Perry Ellis International acquired Rafaella Apparel Group in January.
• Kellwood and its parent company Sun Capital acquired Rebecca Taylor, also in January.
• Delia's has put itself on the block, looking for a private-equity buyer after losing some ground in the crowded teen apparel market. Delia's own chief executive admitted in an earnings call last fall that the company has not advantageously engaged its young shopping through social media like Facebook and Twitter.
• LVMH recently announced it will acquire a controlling stake in Bulgari, the luxury jewelry company.

Preqin, a market research firm, maintains private equity managers have over $400 billion at their disposal to invest in acquisitions, with about half that in the U.S. market. The firm says "a good chunk" of acquisitions are also expected to occur overseas, as domestic companies look to establish themselves in emerging markets. Preqin states, "Retailers, in particular, have spent the recession de-leveraging their balance sheets and hoarding cash. For many companies the mantra became 'cash is king,' and now they are looking to put that cash to work via acquisitions."

Of course, companies that pay attention to consumer wants and needs perform best. In apparel, the Monitor reports the most important factors are fit (97%), comfort (96%), price (93%), quality (92%), durability (89%), style (87%), and color (85%), while brand name comes in at 48%.

On average, consumers spent about $58 on clothes in the past month, according to the Monitor. The number jumps to $81 among those earning more than $75,000.

A recent Thomson Reuters/University of Michigan poll shows among households with incomes of $75,000 or more, consumer sentiment rose 9.7%, bolstered by more favorable job and income prospects. Such stats increase the attractiveness of better retailers who are operating with healthy margins.

American consumers go clothes shopping in stores about twice per month on average, according to the Monitor. One-fourth do most of their apparel shopping at mass merchants (25%), followed by chain stores (23%), department stores (13%), and specialty stores (13%).

Among those earning more than $75,000, the Monitor finds most (27%) do most of their shopping at chain stores, followed by department stores (19%), specialty stores (17%) and mass merchants (12%).

Not all mergers and acquisitions are welcomed or even go through, at least not without a fight. Herm�s recently ruled out a collaboration with rival LVMH Mo�t Hennessy Louis Vuitton SA, even though LVMH bought up 20% of the family-owned company's stock. Herm�s is attractive because its profits jumped 46% last year to $589.1 million from $405 million the year before. And the J. Crew deal had its detractors who wanted to block the acquisition.

On the J. Crew deal, Paul Lejuez, retail analyst at Nomura Securities International Inc., notes in a research report that potential buyout targets would be retailers with a long-term positive view, those that have international opportunities, flexibility and pricing power. Private equity firms will not be acquiring turnaround businesses; instead, they want retailers already in good health.