Saudi Arabia-based retailer Alhokair and mall operator Arabian Centres Company (ACC) have come together to acquire a combined 51 per cent stake in Vogacloset, a UK-based fashion e-commerce marketplace that caters to the Middle East where it has 12 million users.
The buyers will acquire 41.2 per cent of Vogacloset’s existing shares in a joint venture based on a pre-money valuation of $60 million, subject to an earn-out structure conditional on certain growth thresholds according to a statement released today. An additional $12 million will be injected into Vogacloset to develop its presence in Saudi Arabia, grow its customer base and support the integration of Alhokair and ACC’s brands onto the e-commerce platform. Post transaction, Alhokair and ACC will own a combined 51 per cent stake in Vogacloset.
“Partnering with Alhokair and ACC in Saudi Arabia, our key market, is a strategic leap for Voagcloset,” said Hanin Hamarneh, CEO of Vogacloset. “This partnership, and the new investment that it will bring, will support and accelerate the execution of our very ambitious growth plans in Saudi Arabia and the Middle East and will help us to rapidly expand the market for our suppliers’ products.”
Vogacloset will continue to operate independently and will maintain the management and operations of the online platform. The acquisition marks a growing interest in e-commerce from traditional retailers keen to grow their online presence. For both Alhokair and ACC, the move is intended to accelerate their digital transformation efforts.
“Our investment in an online fashion and beauty platform of Vogacloset’s calibre is a significant milestone in our transformation and represents and exciting opportunity,” said Marwan Moukarzel, CEO of Alhokair. “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.”
Alhokair will introduce a range of its brands on Vogacloset while ACC will offer its mall tenants to include listings on the online market place.
“The partnership with Vogacloset will greatly enhance convenience and engagement for tenants and customers…enabling us to offer a more holistic proposition for all our mall tenants, by giving their brands an improved online presence,” said Faisal Al Jedai, CEO of ACC.
Vogacloset intends to make use of ACC’s offline infrastructure and offer services instore pick up and return services.
The acquisition is expected to be completed by the end of June 2021.