Zalando to acquire About You
Zalando, the online fashion retailer, has announced plans to acquire its Hamburg-based competitor, About You. The acquisition offer, valued at approximately €1.2 billion, was disclosed by Zalando on Wednesday. Shares in Zalando subsequently fell by 9%.
About You shareholders, however, are set to benefit with a near 65% increase in the stock's value in response to the news. The company's shares stood at €3.90 at the market close on Tuesday.
According to Zalando co-CEO Robert Gentz, the acquisition is aimed at expanding the company's foothold in the European online fashion and lifestyle market. Zalando has reportedly secured nearly three-quarters of About You's capital, through binding agreements with founders and executive members. The acquisition is expected to be completed by next summer, pending regulatory approval. The incumbent About You management board is set to remain in place.
Zalando aims to increase its annual sales and gross merchandise volume by 5-10% by 2028 to regain its pre-pandemic growth momentum.
Regarding potential job cuts following the acquisition, Zalando has refrained from commenting. The acquisition is anticipated to yield savings of around €100 million annually through logistics, payment processing, and commercial collaboration.
About You went public in June 2021 with an issue price of €23 per share. Since then, the stock has lost about 83% of its value. Zalando's stock also showed a 54% decline during the same period.
Investors' skepticism about acquisition-related challenges, financial burdens, or strategic integration concerns could potentially contribute to temporary stock price drops upon the announcement of major acquisitions. Furthermore, changes in short interest, a company's financial performance, broader market conditions, and economic factors can also impact stock prices (source: enrichment data).
- elaborated by Louisa Eck, dpa
On one hand, Zalando's acquisition of About You signifies a strategic step towards enhancing its foothold in the European online fashion and lifestyle market, through the utilization of technology and business synergies. On the other hand, the financial implications of this acquisition for Zalando could potentially invoke skepticism among investors, who may express concerns over acquisition-related challenges, financial burdens, or strategic integration issues, thereby potentially impacting the company's stock price.
