London-based Vogacloset sells majority stake for Middle East growth
UK-based fashion e-tail platform Vogacloset is selling a 51% stake to Fawaz Abdulaziz Alhokair Co, the leading franchise retailer in Saudi Arabia, and Arabian Centres Company.
The company is a major Middle East-focused fashion and beauty e-commerce operation that was founded in London in 2013 to supply fashionable European products to regional consumers.
It sells women’s, men’s and kid’s fashion, and since 2015, it has grown its sales at a CAGR of 70%+. Labels available on the site include Calvin Klein, Diesel, Guess, Adidas, Birkenstock, Paul & Joe, Superdry, Tommy Hilfiger, Vero Moda and all of Boohoo’s brands, among many others.
With 12 million active users in the Middle East, the companies said the combined brands and resources “will create an unmatched omnichannel [proposition] for consumers and merchants”.
Fawaz Abdulaziz Alhokair — known simply as Alhokair — is a major franchise retailer in the region, while ACC owns, develops and operates lifestyle shopping centres in Saudi Arabia.
The buyers are spending around US$60 million upfront and will pump another $12 million into the company “to further develop its presence in the Saudi market, accelerate the growth of its active customer base and support the integration of Alhokair brands and ACC tenant brands onto the e-commerce platform”.
They said their principal strategic objective for their investment “is to accelerate digital transformation and create a truly modern retail business”. Partnering with a major e-commerce platform is the first pillar of this strategy, “with the intention to create an industry-leading partnership in Saudi Arabia that leverages Vogacloset's asset-light and customer-centric business model, efficient logistics chain and deep understanding of regional and global fashion trends”.
Vogacloset will be integrated via a joint venture established by the buyers and Alhokair CEO Marwan Moukarzel said the deal is “an exciting opportunity” and “the most direct route for Alhokair to extend its leadership position in its core Saudi market – from offline to the online space, while safeguarding our competitive market position”.
He added that “through Vogacloset's platform, we look forward to introducing a range of brands online that is unmatched in the Saudi retail space, addressing our growing customer demand for a genuinely omnichannel experience, and giving our brands extended reach.”
Meanwhile, ACC will strengthen its offering to mall tenants to include listings on the site, providing a supplementary sales channel. And its chief executive Faisal Al Jedaie added that “the partnership with Vogacloset will greatly enhance convenience and engagement for tenants and customers”. He said the JV will add value to ACC “by enabling us to offer a more holistic proposition for all our mall tenants, by giving their brands an improved online presence. We will also be able to provide our malls' visitors with a specialised and advanced loyalty programme, and a simplified and innovative consumer financing solution”.
Vogacloset's platform will also be “enhanced and expanded to become a formidable online/offline play with unified back-end logistics, and the solution will differentiate it from regional peers" by providing features such as click & collect and in-store returns.
The firm will continue to be led by its current leadership team and to operate independently. The executive team has committed to leading the business for at least the next five years. However there will be some change at the top with a board being convened including new members from the two companies that are taking control of the brand.
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