Translated by: Hayat Hernández

Fawaz Abdulaziz Alhokair Co. (“Alhokair”) and Arabian Centers Company (“ACC”) have announced that they will acquire a combined 51% stake in “Vogacloset”, a UK-based online fast fashion platform.

Acquisition for 36.8 million dollars 

This operation has been carried out for 36.8 USD (around 138 million SAR), the deal is considered a composition between acquisition and capital appreciation. As according to Alhokair’s press release, their share of “Vogacloset” will reach 25.5% after increasing its last capital by buying 18.4 million USD shares (about 86.9 million SAR).

On the other hand, ACC’s share of “Vogacloset” will reach up to 25.5% with an 18.4 USD value. In other words, 6.4 million USD were attributed to buying the stocks and 12 million USD as a capital rise in “Vogacloset”.

As a result, Alhokair and ACC’s combined share has reached 51% of Vogacloset’s.

Joint Venture 

According to the press release, it’s thought that “Vogacloset” will be incorporated in a joint venture “JV” established by both ACC and Alhokair in order to boost the development of future opportunities, and aiming to build the two leading Saudi retail players’ unprecedented “omnichannel” experience, regarding consumers and merchants alike. Unsettled plans include launching a “loyalty” program alongside a consumer finance offer.

“Vogacloset” will remain in the leadership

Vogacloset will still be operating, conducted by its executive team who will keep managing its online platform, alongside the CEO and COO for at least the next 5 years. A Board of Directors commanding Vogacloset’s overall direction, supervision, and management will be established comprising of seven members: two nominated by ACC, two nominated by Alhokair, and three nominated by the executive shareholders.

The Aim of the Deal

This transaction is part of the path of digital transformation in MENA corporations in general and the Saudi’s in particular. Alhokair operates in the retail and wholesale trade in fashion, household furniture, electronics equipment, and telecommunications. As well as ACC, owner and conductor of Saudi Arabia’s biggest shopping malls.

Both corporations will have the ability to undertake a large-scale digital transformation by leveraging the expertise of “Vogacloset” in online fashion retail business.

And as Hanin Hamarneh, CEO of “Vogacloset”, commented on the topic:

“Partnering with Alhokair and ACC in Saudi Arabia, our key market, is a strategic leap for 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. We are excited about the opportunity to have the support of, and work closely with, two recognized regional leaders to unlock a huge and growing market.”