Zalando may be preparing for an IPO

Zalando has gathered three banks to advise the German fashion retailer on what may be Europe’s biggest float since the dotcom bubble. Zalando’s choice has fallen on Goldman Sachs, JP Morgan en Morgan Stanley, but the shoe and fashion store has yet to formally appoint them.

The initial public offering could value Zalando at more than 5 billion euros. Although that might seem small compared to Amazon from the United States or the Asian Rakuten and Alibaba, still with that value it would compete to be or become the biggest European store that’s basically purely online. That’s quite bigger than for example the Italian Yoox that is currently valued around 2 billion euro. Competitors such as the German Otto, Asos from the United Kingdom and Sarenza from France still are in hands of investors or the business themself and thus it’s hard to know their exact value and to compare, but fact is that Zalando’s growth has been immense recently.

The predicted value could make some shareholders very rich. Founders Marc, Alexander and Oliver Samwer together still own 17% of the company, while other backers are Russian billionaire Yuri Milner, Danish fashion tycoon Anders Holch Povlsen and Swedish investor Kinnevik. The latter is Zalando’s biggest shareholder, with 37%.

Zalando yet to make a profit
Zalando was founded five years ago and until now it never made a profit, however it did grow fast in turnover and aimed on growing in market share first. In that it seemed to succeed and although it still made a loss in 2013, in percentages the loss was quite less than the year before. It generated 809 million euros in turnover in the first half of 2013, while in 2012 it doubled its annual revenue to 1.15 billion euros.

Two months ago, the company changed its legal form from a German limited liability company (GmbH) to a private German stock corporation (AG), which implies Zalando is indeed preparing for an IPO.

Photo Credit: Michael Panse cc