Zalando is looking to go bigger in streetwear and has bought a majority stake in Highsnobiety, the media brand at the crossroads of streetwear and luxury.
Highsnobiety will act as a strategic and creative consultant to the German e-commerce giant, but also “retain its editorial independence, with creative agency work remaining fully autonomous and management structure unchanged,” the firms said.
“The two companies will join forces to lead the way in engaging and inspiring customers,” according to a statement from Zalando and Highsnobiety. “They will leverage each other’s complementary strengths by bringing together Highsnobiety’s cultural relevance and insight, fashion authority and storytelling expertise with Zalando’s fashion network, e-commerce know-how and operational capabilities.”
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Highsnobiety founder and chief executive officer David Fischer, who founded the brand as a Berlin-based blog in 2005, has retained a minority stake in the business. The company will continue to be led by Fischer and Jürgen Hopfgartner.
“Highsnobiety has mastered the art of turning stories into products and products into stories,” Fischer said. “I am very excited to bring our capabilities to Zalando’s commitment toward fashion inspiration and together reimagine the future of content and commerce. Equally, I am thrilled to tap into Zalando’s unrivaled expertise in scaling e-commerce platforms and bring my lifetime’s passion work to the next level.”
And David Schneider, Zalando’s founder and co-CEO, said: “Both of our companies share a passion for building strong brand partnerships and enabling brands to inspire audiences with their products and stories. Partnering with Highsnobiety will allow us to execute much faster on our ambition to offer the most relevant and engaging — as well as convenient — shopping experience to our customers. I’m excited to see our joint vision materialize and to shape the future of fashion content in commerce together.”
Last year, The New York Times first reported the potential sale of Highsnobiety, citing two people familiar with the matter that the media company had hired Aryeh Bourkoff’s boutique firm LionTree, a global investment and merchant banking firm focused on media, technology, and telecommunications, to handle the situation.
For the deal between Highsnobiety and Zalando, Highsnobiety was advised by Liontree, V14 – Vogel, Heerma & Waitz, and Taxess. Zalando was advised by White&Case, PwC, and McKinsey.
Founded as a streetwear blog in 2005, Highsnobiety has grown into a destination for street culture, with business spanning e-commerce, in-house fashion lines, events, and physical publications.
According to data provided by Similarweb, the U.S., the U.K., Canada, and Australia are four of its biggest markets, representing around 60 percent of visitors. WebsiteIQ revealed that Highsnobiety has on average 1.48 million unique visitors a month.
It’s been reported that the company brought in around $60 million in revenue last year. In comparison, one of its main competitors in the space, Hypebeast, a listed company on the Hong Kong Stock Exchange with a market capitalization of 2.42 billion Hong Kong dollars, or $311.2 million, made 674.2 million Hong Kong dollars, or $86.68 million, for the year ended in March 2021.
Its other main competitor, Complex Media, was bought by Verizon and Hearst in 2016 in a 50-50 ownership structure. The terms of the deal were not disclosed. The Verizon-Hearst pact valued Complex at between $250 million and $300 million, the Wall Street Journal reported, citing anonymous sources.
E-commerce players that focus on street culture and emerging fashion brands have also been a target for investors. Canada’s Ssense sold a minority stake to Sequoia Capital this past June, valuing the e-tailer at $4 billion. Similarly, private equity firm The Carlyle Group in March acquired a majority stake in the British premium streetwear retailer End, which valued the retailer at 750 million pounds, or $1 billion.
Highsnobiety received $8.5 million in funding led by the U.K.-based venture capital firm Felix Capital in 2018. Highsnobiety claimed back then that it had grown 100 percent year-over-year in the previous three years.
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