Zalando pulls plug on Emeza and Kiomi, prepares for IPO

One-stop-webshop

Zalando surprised everyone when it opened a web shop for luxury brands like DKNY, Michael Kors and Missoni in
the beginning of 2013, brands that were claimed “not to feel at home at Zalando”.
A luxury site, Emeza.de, targeted this higher section of the market.  A month later, another site – specifically geared
towards Zalando’s own brand Kiomi – was also launched. It immediately received a lot of criticism as plenty of people believed Kiomi would not be able
to compete with large, general brands.

Some nine months later, Zalando has decided to pull the plug on both web shops
in “the foreseeable future”. After that, Kiomi will only be on saleon Zalando and the luxury brands will have
to content themselves with a premium section on Zalando’s web shop. In short,
Zalando is moving back to its original concept where one web shop ruled the
entire array of products.

Preparation for IPO?

It is unclear why Zalando has opted for the change in course, but a lack of luxury brands and
disappointing sales could explain Emeza’s termination. Another possible explanation is that Zalando
is preparing an IPO, as possible investors would prefer a more transparent business model. Zalando heading for the stock exchange has been a hot topic ever since
the German Wirtschaftswoche magazine was able to browse through documents
detailing the IPO.

It said that Zalando’s management would get 1.4 % of all shares, while
employees would get another 1 %. These shares are valued at some 88 million
euro, resulting in an estimated total value
of 3.67 billion euro – a huge number for a company that has failed
to make a single euro in profit ever since it launched. Despite a slower
growth, Zalando is expected to get a 2013 turnover of 2 billion euro.

(Translated by Gary Peeters)