Mar 7, 2011
Online fashion firm Privalia bags Dress for Less
Mar 7, 2011
March 7 - Online fashion retailer Privalia is buying Germany's Dress for Less to create a global leader in the fast-growing internet clothing market, in a deal which one person close to the matter said was worth 150-200 million euros ($210-280 million).
Privalia, a private online sales club with leading positions in Spain, Italy, Brazil and Mexico, declined to say how much it was paying for Dress for Less, which does not require customers to be members to make purchases.
However, Privalia said on Monday it was raising 88 million euros ($123 million) for the deal from private equity firms General Atlantic, Highland Capital Partners, Index Ventures and Insight Venture Partners.
It will also pay for the transaction with an undisclosed amount of debt and shares, with the result that Dress for Less founders and managing partners Mirco Schultis and Holger Hengstler will become significant shareholders in Privalia.
Private equity owned Privalia, which is buying Dress for Less from buyout firm Palamon Capital Partners, forecast the combined company would achieve triple-digit percentage revenue growth this year to around 400 million euros.
Online clothing retailers have enjoyed a boom in sales growth during the economic downturn, as high-speed internet connections have boosted the convenience of shopping remotely.
This has led major clothing store groups, such as Spain's Inditex and Sweden's Hennes & Mauritz, to step up their investments online.
Swiss luxury goods group Richemont last year moved to buy the 67 percent of British online fashion retailer Net-a-Porter it did not already own.
Privalia, which was founded in Spain in 2006 by Lucas Carne and Jose-Manuel Villanueva and has over 6 million members, saw sales leap 141 percent to 168.4 million euros in 2010.
That compares with the 223 million pounds ($363 million) achieved by ASOS, Britain's biggest pure online clothing retailer, in the year ended March 2010.
ASOS itself is often tipped as a bid target for a clothing store group, an online specialist such as Amazon, or for major Danish shareholder Bestseller.
Italian online fashion retailer Yoox reports 2010 results on Wednesday.
By Mark Potter
(Editing by Andrew Callus and Louise Heavens)
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