Alhokair and Arabian Centres to acquire 51 percent stake in online fashion retailer, Vogacloset
Alhokair, a leading franchise retailer in Saudi Arabia, and Arabian Centres Company, the owner, developer and operator of lifestyle shopping centres in Saudi Arabia will acquire a combined 51 percent stake in Vogacloset, a UK-based online fast fashion platform offering over 400 brands in the latest women’s, men’s and kids’ trends to fashion enthusiasts in the Middle East.
The buyers will acquire 41.2 percent of Vogacloset’s existing shares based on a pre-money valuation of USD 60 million, subject to an earn-out structure conditional on certain growth thresholds. In addition, USD 12 million will be injected into the capital of Vogacloset 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 Arabian Centres Company tenant brands onto the e-commerce platform.
Led by its current leadership team, Vogacloset will continue to operate independently, and will keep on managing and operating its online platform vogacloset.com. The executive team, including the CEO, COO and Executive Chairman, have committed to continue leading the business for at least the next five years. A Board of Directors governing Vogacloset’s overall direction, supervision, and management will be formed comprising of seven members: two nominated by Arabian Centres Company, two nominated by Alhokair, and three nominated by the executive shareholders.
The transaction is subject to the fulfilment of various conditions, and expected to be completed by end of June 2021.
Commenting on the acquisition, Marwan Moukarzel, Chief Executive Officer of Alhokair, said: “This strategic investment in a sizeable and profitable regional e-commerce player is 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. We remain committed to our digital integration programme and transition to a lifestyle retailer of choice. 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.”
The buyers’ principal strategic objective for their investment in Vogacloset is to accelerate digital transformation and create a truly modern retail business. Partnering with a leading 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.
Arabian Centres Company will strengthen its offering to mall tenants to include listings on the online marketplace, thereby providing a supplementary sales channel. Meanwhile, Vogacloset’s platform will be enhanced and expanded to become a strong online/offline play with unified back-end logistics, and the solution will differentiate it from regional peers by providing unique features such as “buy online, pick up in store”, and “buy online, return in store”.