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Privalia raises €88 million and buys Dress for Less
March 7th, 2011 1 comment
Spending more than €88 million for the acquisition of the biggest German online fashion retailer, Dress for Less, Privalia has once again showed its desire of becoming the global provider of discount labels.
Privalia is a private sales club which operates huge sales for brand products on the internet exclusively for their club members. This company based in Spain has approximately 5 million members worldwide and it is the leader on each of the markets on which it operates. The markets on which Privalia already holds the majority of online fashion sales are based in Spain, Italy, Brazil and Mexico. The new goal established by the company is that of becoming a leader of the worldwide market. In order to achieve this, Privalia managed to raise €88 million which were spent in order to buy the German online fashion retail, Dress for Less. This major acquisition allows them to grow incredibly much on the European market, putting their competition in a very difficult position. Although their leadership on the European display areas was limited to Spain and Italy till now, the acquisition of the most important online discount site in Germany allows them to spread more on the continent and to assure us that their intention is of becoming the global leader of the online fashion retail stores is to be accomplished.
Dress for Less is a distribution platform working with discount and full prices segment on the internet. The company has been founded in 1999 in Germany, but it has spread worldwide. Since then, it has spread in more than 50 countries in the world and has over 500,000 active clients and a database of total costumers of over 1 million.
Part of the amount of money needed for the transaction, meaning €88 million, has been obtained in new equity financing from General Atlantic, Index Ventures, Highland Capital Partners and Insight Venture Partners, while the site has been acquired from Palamon Capital partners, which is a pan-European private equity company. In order for the acquisition process to be complete, Privalia has to offer the €88 million provided by the private equity firms named above, a debt facility and shares. But this comes in addition to the €70 million which have already been raised by Privalia in a funding round in October 2010. The transaction has been made such wise as for the managing partners of Dress for Less, Mirco Schultis and Holger Hengstler, to become “significant shareholders” in the new company, ran now by Privalia.
By this new acquisition, Privalia wants to accomplish its goal of gaining over 400 million euros this year. The strategies they will use in order to attaint this goal are based on perspectives upon combined sales and upon global triple-digit growth. The newly acquired base of clients which goes up to 1 million new potential customers and the merging of the products offer may be just what they needed in order to achieve this competitive goal.
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This is so good to know! Having a more competitive online sales market is just the way of the future. Hope it will all turn out well for everybody! Congratulations to the venture capitalists who decided to put their money in such a business!