Privalia Venta Directa SL, the Barcelona-based online sales club, has expanded its reach into Germany — and its business activity into the liquidation of excess stock — with the acquisition of Dress for Less, the Frankfurt-based value fashion e-tailer, from European private equity firm Palamon Capital Partners.
As part of the transaction, Privalia raised about 88 million euros, or $123 million at current exchange, from General Atlantic LLC, Highland Capital Partners LLC, Index Ventures LLP and Insight Venture Partners. Although the purchase price wasn’t disclosed, Privalia said it would be funded through the capital infusion as well as a debt facility and Privalia shares.
In October, Privalia raised 70 million euros, or $98 million, through investments by General Atlantic, Index and Highland.
The investing firms have diverse portfolio holdings, with General Atlantic best known in the fashion sector for its investment in Gilt Groupe.
Privalia, which has more than 6 million members, currently operates in Spain, Brazil, Italy and Mexico, and in 2010 saw a 140.6 percent sales increase to 168.4 million euros, or $235.5 million at average exchange. Sales this year are expected to more than double to about 400 million euros, or about $560 million. Dress for Less has more than 500,000 active customers and operates in more than 50 countries.
Mirco Schultis and Holger Hengstler, the managing partners of Dress for Less, and other founders of the German firm will become “significant shareholders” in Privalia.
Lucas Carné and José-Manuel Villanueva, co-founders of Privalia, commented, “This acquisition brings a significant geographic expansion, a leadership position in Germany, and expands the Privalia business model, providing Privalia with a large and effective channel for the private sales of return stock.”