Zalando’s IPO debunked: investors not expected to cash out

Europe's largest online fashion retailer Zalando does not expect investors to use any initial public offering (IPO) to cash out of the company. Besides, the highly anticipated IPO might be smaller than expected. The Berlin-based start-up is considering an IPO in October, people familiar

with the transaction told Reuters on Monday. The news prompted speculation in a recent article in German business monthly ‘Manager Magazine’ that Rocket Internet founders, brothers Oliver, Marc and Alexander Samwer, might look to cash out at least some of their investment, along with Kinnevik of Sweden.

Responding to the rumour that has shaken the market since then, Ruben Ritter, a member of the online fashion platform, told the ‘Boersen-Zeitung’ in an interview that "Management and investors are completely convinced of our strategy and our business model which we want to continue to build together."

"It bothers me that an IPO is always equated with investors cashing in and exiting. That doesn't have to be the case. An IPO can also serve to raise capital for the business to bring it to a new level," Ritter concluded.

Zalando to reduce its IPO in October

Additionally, Europe's largest online fashion retailer, Zalando, might be considering reducing the size of its stock market listing, people familiar with the transaction said in early July.

"I do not think it will be a transaction larger than a billion euros (1.36 billion dollars)," a source close to the matter told to Reuters, adding that only 10-15 percent of the company may be floated. "But no final decisions have been taken yet." Originally, the group had discussed a listing worth more than one billion euros.

Zalando counts on Credit Suisse, Morgan Stanley and Goldman Sachs to advise on a potential listing, aimed for October.

Main shareholders at Zalando currently are Kinnevik with a majority stake - 36 percent -, European Founders Fund of the Samwer brothers with a 17 percent and Danish fashion mogul Anders Holch Povlsen with nearly a 10 percent of the company´s total equity.

Angela González Rodríguez