About You IPO  performance aptly backed by its sound financials

Summary 

• Fashion retailer About You had a blockbuster IPO in Germany on 16 June.
• On the listing day, the sharesof the company opened 11.3 per cent higher than the offer price.
• For the year ended 28 February 2021, the company’s revenue grew 56.9 per cent.

Fashion retailer About You (YOU) had a blockbuster IPO (initial public offering) listing in the Frankfurt stock exchange last month on 16 June. The shares opened 11.3 per cent higher than the offer price.

The offer price of the share of the Hamburg-based fashion company was at EUR 23 each, and it opened at EUR 25.6 each share.

About You’s financials and share price performance

The company was valued at EUR 4 billion, and its valuation is aptly backed by sound financials. For the year ended 28 February 2021, the company’s revenue grew by 56.9 per cent to EUR 1,166.5 million from EUR 743.4 million. Gross profit grew 48.4 per cent to EUR 490.4 million from EUR 330.4 million.

The shares of the company have a market capitalisation of EUR 4.54 billion and were trading up by 0.36 per cent at EUR 24.35 on 13 July at 08:00:59 on the Frankfurt Stock Exchange.

The shares were up 0.36% on 13 July at 08:00:59 on the Frankfurt Stock Exchange                                            (Image Source-REFINITIV)

About You’s business model

The fashion retail company was founded by Tarek Müller and Sebastian Betz in 2014. The company sells to consumers directly through an app. It has operations in 23 markets. About You aims to target the women shoppers in the age group of 20-30, with a customised shopping experience on the smartphone by digitising the walk inside a mall. Its competitors include the clothing collections of Zalando SE and Asos Plc. In the business-to-business segment, its competitors include SAP, Salesforce, and Shopify.

Danish tycoon Anders Holch Povlsen and mail-order group Otto are behind the fashion retail company. The Covid-19 pandemic proved to be a boon for e-commerce businesses across the world, as lockdowns and restrictions shrunk the world indoors. However, About You’s business is said to have been negatively impacted by the pandemic. Sales in its eveningwear category declined. As lockdowns are being eased across Europe, it is expected to benefit because online shoppers would be looking to shop for outdoor and party outfits.

About You’s IPO happened several months after THG Plc’s, the online shop, which is listed in London and runs on a similar model. The Ingenuity business of THG aids other retail companies to run their digital offerings, and at the same time, it also operates websites that market diverse offerings like beauty products to protein powders.

About You too, apart from the retail operations, also runs an online e-commerce platform similar to that of Shopify Inc. The clients include brands such as Marco Polo as clients. Anders Holch Povlsen and his family’s holding company, Shareholder Heartland, holds stakes in Zalando and Asos.

Expansion plans

The company on 6 July announced plans to expand its network of warehouses in Slovakia in collaboration with Ingram Micro, a leading third-party logistics and e-commerce solutions company. The new location was being constructed since the last year end and would function additionally to the existing warehouse. The opening is expected to take place this autumn, but the groundbreaking happened on the 17^th of the last month.

The location was finalised because it is well connected to the Eastern and Central European markets, which would ensure quick delivery to customers. The company’s director logistics Henryk Patzelt said that to continue its expansion towards Eastern and Central Europe, the company was scouting for a logistically well-connected and flexible site, and the company was happy to have found the suitable site in Slovakia and expects to begin operations there by the year end. The warehouse network expansion supports the present strong growth of the company, as well as its future growth plans.