Zalando (ZAL GR) Germany
Consumer Discretionary
Iron Blue initiates coverage on ZAL with a score of 28/60, which is top decile (fertile grounds for shorting) and an outlier compared with bottom decile/quartile scores of internet peers Auto Trader (13/60), Rightmove (11/60) and Scout24 (16/40). They highlight 1) Increased use of stripped out restructuring and other costs. 2) Stripped out share-based payments (27% PBT adj). 3) Profit recovery supported by compressed fulfillment, marketing and inventories provision expenses. 4) Pronounced gap between tangibles capex and the depreciation charge. Re. governance, they note CEO variable pay targets that are either undisclosed or below external targets, a non-independent Remuneration Committee and sizeable related party transactions. FY24 sees a change in auditor following the incumbent’s tenure of 13 years.
Edition: 202
- 10 January, 2025
Consumer Discretionary
Management exodus continues - ASC’s interim CFO is the latest to go. The lack of internal controls brings into question the firm’s ability to work through their long to-do list (growth outside UK, brand partnership expansion, extending target audience, stretching wallet share and its Partner Program roll out) and near-term challenges (cash, management, etc.). In their previous report, 'Online Fashion: Predator or Prey?', Arete cut their TP to 200p (from 300p) - believes ASC could end up facing a stark choice between a set of acquirers, possibly Zalando or PE, before seeing its equity being wiped out by rising costs / debt burdens.
Edition: 150
- 09 December, 2022
Zalando (ZAL GR) Germany
Consumer Discretionary
Interesting to see two of the biggest shareholders making large purchases with the shares near all-time highs - Cristina Stenbeck (Chairman of Supervisory Board) purchased 495,000 shares at €89.55, spending €44m. The Stenbeck family has a meaningful stake in Kinnevik, which is the largest shareholder in ZAL (20% holding). Last year she purchased shares at €47 and €52, but those were small purchases compared to this recent one. It also follows a €40m purchase at €86 from Anders Povlsen (Supervisory Board) for a Danish investment fund (10% holding). Smart Insider increase the Stock Rank to +1 (highest rating).
Edition: 112
- 11 June, 2021
Kinnevik AB (KINVB SS) Sweden
Financials
In a major push to focus on its younger, high-growth, unlisted businesses, KINV continues to slim down its portfolio by Spinning off its entire 21% stake in Europe's largest online-only fashion retailer, Zalando. This is not its first Spinoff either - KINV’s last stake distribution (Millicom International Cellular) occurred in 2019 - the stock has since risen 118% (vs. 19% OMX Index). The Edge will analyse and advise on KINV and 8 other global Spinoffs in Q2 2021.
Edition: 108
- 16 April, 2021