BestSecret considers IPO
German online fashion platform BestSecret is planning an initial public offering in the summer of 2022. The company could be valued at more than three billion euros. BestSecret wants to use the raised funds to expand internationally.
BestSecret is an online fashion platform based in Munich, Germany. It offers items from high-end brands such as Dior, Armani, but also Puma, at discounts. To be able to shop on the platform, customers have to become members. So far, a total of one million customers have registered.
Sales total of 800 million euros
The platform is active across Europe and most of its revenue is generated by online sales, though some of the goods are also sold in stores in Munich, Frankfurt and Vienna. Due to the COVID-19 pandemic, the platform saw an exponential increase in its sales numbers. It expects to reach a total sales amount of around 800 million euros this year, which is an increase of 40 percent when compared to last year.
‘Profits are expected to rise over 160 million euros in 2022.’
The company expects its earnings before interest, taxes, depreciation, and amortization (EBITDA) to reach 135 million euros this year, which would be an increase of around 25 percent. Its profits are expected to rise over 160 million euros in 2022.
‘IPO in summer 2022’
In 2016, financial investor Permira took over BestSecret’s parent company Schusterman & Borenstein at a valuation of 730 million euros. Now, Permira wants to sell part of its 80 percent stake of BestSecret. “An initial public offering in 2022 is conceivable in the summer”, said Permira’s CEO Jörg Rockenhäuser.
‘Competitors on average are traded for around 25 times the Ebitda.’
Other German competitors that are already listed such as Zalando, MyTheresa and About You, as well as global competitors such as Revolve, Farfetch, Bohoo, Next and Asos on average are traded for around 25 times the Ebitda expected for 2022. A similar valuation would bring BestSecret’s worth to almost four billion euros.
However, it remains to be seen how much investors are actually willing to pay for BestSecret at the time of the IPO. This will depend on how the company continues to grow and how competitors are rated at that moment. The IPO will generate a capital injection for further international expansion of the company.