The Board of Directors and Supervisory Board of ABOUT YOU welcome the strategic transaction, which brings together two teams led by founders with a strong cultural fit, entrepreneurial track record and highly complementary capabilities. Subject to the review of the offer document to be published by Zalando, the board of directors and supervisory board of ABOUT YOU intend to recommend shareholders accept the offer. The three founders and board members of ABOUT YOU, Sebastian Betz, Tarek Müller and Hannes Wiese, are committed to accepting the offer and continuing their successful work in their current roles.
The main shareholders of ABOUT YOU, Otto Group, Otto Family, HEARTLAND and the management of ABOUT YOU, entered into binding agreements to sell their shares in ABOUT YOU, representing around 73 percent of the share capital of ABOUT YOU, by accepting the public offer or separately, to Zalando.
Zalando will acquire ABOUT YOU in a strategic merger to enhance B2C and B2B offerings, covering a greater share of the European fashion market. ABOUT YOU founders and key shareholders support the deal. The partnership targets annual EBIT synergies of €100 million (~$105 million) and plans to close in summer 2025, pending regulatory approval. Zalando offers 6.50 euros per share, a premium of 107 percent over the 3-month average price.
“Redefining fashion and lifestyle shopping by creating the best possible experience for customers and partners has always driven our teams. “I am excited about how together we will be able to cover a larger portion of the fashion and lifestyle market,” he said. Robert Gentz, co-CEO and co-founder of Zalando. “In B2C, we can offer customers and brands rich and different shopping experiences. In B2B, the combination of our complementary software capabilities, Tradebyte and SCAYLE, will create an even more advanced e-commerce operating system that will enable brands and retailers to manage their multi-channel businesses in Europe and beyond.”
ABOUT YOU's operations add scale and complementary capabilities, and also influence Zalando's ecosystem strategy, communicated in March 2024, to build a pan-European fashion and lifestyle e-commerce ecosystem around two growth vectors, B2C and B2B, to deepen relationships with clients and partners. The transaction entails attractive value creation opportunities that the two companies, operating in the same industry, can generate by collaborating in a wide range of areas such as B2B, logistics, payments and commercial collaboration. In the long term, Zalando is targeting significant synergies in the group's EBIT, of around €100 million per year.
Reinforcing management's conviction in the value creation of this transaction, Zalando confirms its medium-term prospects also for the combined group. Zalando, including ABOUT YOU, is expected to grow GMV and revenue through 2028 at a five-year compound annual growth rate of between 5% and 10%. The combined company expects an adjusted EBIT margin in 2028 in the range of 6% to 8%, which will generate a significant increase in absolute profit by creating a larger scale combined group. Together, Zalando and ABOUT YOU aim to cover a larger share of the €450 billion European fashion market than previously anticipated.
In the B2C growth vector, adding ABOUT YOU will allow Zalando to implement a dual brand strategy. Each brand will retain its distinctive identity while leveraging synergies in logistics, payment infrastructure and business collaboration. This strategic move will allow the combined entity to provide personalized and separate shopping experiences, effectively meeting the unique needs and preferences of its customers.
Zalando appeals to fashion enthusiasts and is therefore more brand-focused, differentiating itself by offering an unrivaled selection of more than 6,000 lifestyle brands to its more than 50 million customers. Excite customers with the best possible quality shopping experience, related to every part of the customer journey: a variety of high-quality brands, digital experience, sustainable and inclusive brand options, as well as personalized and localized convenience. Zalando is also leveraging these high-quality relationships to expand its role in customers' lifestyles, turning categories like Sports and Kids & Family into engaging experiences, and integrating content and data into commerce to deliver personalized inspiration and entertainment.
ABOUT YOU attracts a young fashion audience and therefore focuses more on style. Celebrate individual styles, set trends and combine shopping with entertainment through live events, interactive formats and social media hosts to create a vibrant fashion community. With a network of more than 27,000 content creators, ABOUT YOU offers more than 12 million active customers access to 700,000 styles from renowned brands, innovative manufacturers, private labels and unique celebrity collections. Its collaborations with international talents from sports, music, film and modeling have resulted in 119 exclusive collections for its style-conscious clients.
In the B2B growth vector, ABOUT YOU's SCAYLE software unit will perfectly complement Zalando's ZEOS e-commerce operating system, which allows brands and retailers to manage their multi-channel businesses across Europe within a unified platform, consisting of logistics infrastructure, software and service offerings. regardless of whether they take place on or off the Zalando platform.
Zalando's Tradebyte software unit is already helping retailers and brands sell their products through various online marketplaces. SCAYLE is now expanding Zalando's offering with a customized solution to service brands' and retailers' own web and app stores, often the most important sales channels for many brands, even those running multi-channel businesses.
SCAYLE is one of the fastest growing software-as-a-service trading platforms globally and is already highly profitable. SCAYLE offers customized enterprise software solutions for brands and retailers across all verticals, with an especially large number of features for the fashion and lifestyle segments serving more than 200 stores in Europe and North America.
“We are delighted to partner with so many brilliant fellow entrepreneurs and together take the success stories of Zalando and ABOUT YOU to the next level,” he said. Tarek Müller, co-founder and co-CEO of ABOUT YOU. “This transaction creates something truly unique, with two distinct and independent B2C businesses serving the specific needs of their customers. At the same time, the complementary strengths of B2B businesses will be perfectly aligned to deliver a comprehensive and optimized offering for customers in logistics, software and services.”
The deal will also help the joint group enable positive change for a more sustainable and inclusive future of the fashion and lifestyle industry, helped by its greater scale and greater relevance to customers and brands. Both companies share a long-standing partnership in this field and have jointly launched several initiatives to promote responsibility within the fashion industry, such as FASHION LEAP FOR CLIMATE and FASHION AGAINST FASCISM. Going forward, Zalando and ABOUT YOU will also intensify their joint efforts to empower their customers to make informed purchasing decisions.
Zalando's planned takeover bid of €6.50 per ABOUT YOU share represents a 12 percent premium to analysts' average target price of €5.80 and a 107 percent premium to the weighted average price by volume of ABOUT YOU 3-month shares on December 10. 2024, enabling the realization of significant value for existing ABOUT YOU shareholders. The transaction is expected to close in summer 2025, subject to obtaining relevant regulatory approvals.
The offer document and other information relating to the planned takeover bid by Zalando will be prepared in accordance with the German Securities Takeover and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – WpÜG). The offer document will be published following approval by the German Federal Financial Supervisory Authority (BaFin).
The offer document, once approved for publication by BaFin, and further information will be available on the following website: www.the-perfect-fit.de. Zalando is advised by JP Morgan as financial advisor, Sullivan & Cromwell as legal advisor and FGS Global as communications advisor. ABOUT YOU is advised by Deutsche Bank and White & Case on this transaction.
Note: The headline, ideas and image of this press release may have been refined by Fibre2Fashion staff; the rest of the content remains unchanged.
Fiber2Fashion News Desk (RM)
