As part of its plans to create a pan-European e-commerce platform, German online retailer Zalando has said it will acquire fashion group About You in a deal that values its rival at €1.1 billion.
In a mutual communication Zalando and About You say the companies have “agreed to team up to better serve the needs of customers and partners through their combined and distinct B2C and B2B offerings, enabling the combined group to cover a larger share of the European fashion and lifestyle e-commerce market.”
The companies have entered into a definitive business combination agreement, under which Zalando intends to submit a voluntary public tender offer to acquire up to 100 percent of About You’s share capital.
About You’s management and supervisory boards welcome the transaction, which brings together two founder-led teams 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, About You’s management and supervisory boards intend to recommend that shareholders accept the offer. About You’s three founders, Sebastian Betz, Tarek Müller and Hannes Wiese, all serving on the management board, are committed to accepting the offer and continuing to work in their current roles.
Major About You shareholders Otto Group, Otto Family, Heartland and the About You management have entered into binding agreements to sell Zalando their About You shares, which represent about 73 percent of the share capital, whether by accepting the public offer or acting separately.
“Redefining fashion and lifestyle shopping by creating the best possible experience for customers and partners has always driven both our teams. I’m excited about how together we’ll be able to cover a larger share of the fashion and lifestyle market,” said Robert Gentz, co-CEO and co-founder of Zalando. “In B2C, we can offer customers and brands distinct and rich shopping experiences. In B2B, combining our complementary software capabilities, Tradebyte and SCAYLE, will create an even more advanced e-commerce operating system that enables brands and retailers to manage their multi-channel business across Europe and beyond,” he concluded.
About You’s operations add scale and complementary capabilities and also play into Zalando’s ecosystem strategy, communicated in March 2024. The idea is to build a pan-European fashion and lifestyle e-commerce ecosystem around two growth vectors, B2C and B2B, and thereby deepen relationships with customers and partners. The transaction comes with compelling value-creation opportunities that the two companies, operating in the same industry, can generate by collaborating in a wide range of areas, such as logistics, payments and commercial operations. In the longer term, Zalando targets significant Group Ebit synergies of around €100 million per annum.
To underpin its conviction in the transaction’s value creation, Zalando’s management is confirming its medium-term outlook also for the combined group. With About You included, Zalando is expecting to grow GMV and revenue through 2028 at a five-year compound annual growth rate of 5 to 10 percent. The combined company expects an adjusted Ebit margin in 2028 on the order of 6 to 8 percent, which would in turn yield a significant increase in absolute profit, thanks to the larger scale of the combined group. Together, Zalando and About You aim to cover a larger share of the €450 billion European fashion market in the long term than previously targeted.
In the B2C growth vector, adding About You will enable Zalando to implement a dual-brand strategy. Each brand will retain its distinct identity while leveraging synergies in logistics, payment infrastructure and commercial operations. This will allow the combined entity to provide tailored and separate shopping experiences to meet the unique needs and preferences of their customers.
Zalando appeals to fashion enthusiasts and is therefore more brand-led, offering a selection of more than 6,000 lifestyle brands to its more than 50 million customers. It seeks to excite customers with a quality shopping experience through every part of the customer journey: brand assortment, digital experience, sustainable and inclusive brand choices, and personalized and localized convenience. Zalando is also building on these relationships to expand its role in customer lifestyle journeys, sseking to make categories like Sports and Kids & Family into captivating experiences and integrating content and data into commerce to offer personalized inspiration and entertainment.
About You appeals to a young fashion audience and is therefore more style-led. It celebrates individual styles, sets trends, and combines shopping with entertainment through live events, interactive formats and social media posts to create a vibrant community. With a network of over 27,000 content creators, About You offers over 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 led to 119 exclusive collections for its style-conscious customers.
