Alhokair And ACC Increase Online Presence With Vogacloset Deal
Recently, two major Saudi retail players announced a joint purchase of a 51 percent stake in the UK-based e-commerce platform Vogacloset. According to their Tadawul filings, retail franchise conglomerate Fawaz Abdulaziz Alhokair Co. (Alhokair) and shopping center operator Arabian Centers Company (ACC) will each own 25.5 percent of Vogacloset for SR68,856,933 ($18,360,254).
According to available information, the new investors will invest $12 million in Vogacloset to further expand its presence in the Saudi market, accelerate the growth of its active customer base, and help the incorporation of Alhokair brands and ACC tenant brands into the e-commerce platform.
Vogacloset, which first opened its doors in London in 2013, offers European fast fashion and beauty items to Arab customers. Its revenues have increased by 70% since 2015, and by 2020, it has drawn 12 million unique users across the Middle East, with Saudi Arabia accounting for more than half of them.
Vogacloset’s revenue increased from SR58 million in 2018 to SR266 million in 2020, according to a Tadawul listing by Alhokair. As a result, it went from an SR240,000 net loss in 2018 to an SR10.94 million net profit last year.
According to Alhokair and ACC, the deal’s financial effect will be felt from Q1 FY2022 onwards in terms of profit-sharing, as well as a rise in sales of its products and offerings on the platform. By the end of June 2021, the contract should be done.
This strategic investment in a sizeable and profitable regional e-commerce player is the most direct route for Alhokair to expand its leadership role in its core Saudi market — from offline to online space — while safeguarding the competitive market position.
ACC would improve its service to mall tenants by allowing them to list their produce on the platform and offer ‘buy online, pick up in-store’ and ‘buy online, return in-store’ options.
This alliance, and the new investment it will bring, will help and accelerate the execution of ambitious growth plans in Saudi Arabia and the Middle East.
Alhokair, which was established in 1990, operates 1,800 stores in 100 shopping malls across 13 countries, employing over 12,000 people and representing about 90 brands in womenswear, menswear, kids’ and baby’s clothing, department stores, shoes and accessories, cosmetics, and coffee shops. ACC owns and manages 21 shopping malls in 11 Saudi cities.
The deal will boost e-commerce further and lead to generation of employment opportunities.