BERLIN, Germany — Danish fashion store magnate Anders Holch Povlsen has bought 10 percent of Europe's biggest online fashion retailer Zalando, continuing a push into booming e-commerce.
Fashion retailers are looking increasingly to expand into online shopping as more consumers buy clothes from home. Hennes & Mauritz (H&M) launched online sales in the United States earlier this month.
Zalando said in a statement that Povlsen, who owns the Bestseller group known for shops like Jack & Jones and Vero Moda, had bought shares from early investors including European Founders Fund (EFF), Holtzbrinck and Tengelmann, which have all retained stakes in the company founded in 2008.
A Zalando spokesman declined to give the price paid by Povlsen, who Forbes estimated is worth $2.5 billion and who also owns 28 percent of Zalando's British rival ASOS.
"Anders Holch Povlsen will be a strong and long-term-oriented shareholder and together we want to design the future of fashion e-commerce," Rubin Ritter, Zalando managing director, said in the statement.
Speculation has mounted that Zalando could soon look to float on the stock market, although the founders of the Berlin-based firm have said they first want to focus on achieving profitability in core markets.
Zalando has been extending its lead over ASOS as Europe's largest online fashion site, expanding from shoes to clothes and now selling over 1,000 brands. Its 2012 net sales doubled to 1.2 billion euros ($1.60 billion).
In a separate statement, Rocket Internet, the venture capital company behind Zalando, said it had transferred its stake in the company to Swedish investment firm Kinnevik, EFF and Access Industries. Kinnevik and EFF had previously held part or all of their stakes indirectly via Rocket Internet.
Kinnevik now owns a 37 percent stake, EFF has 18 percent, while retail group Tengelmann trimmed its stake to 6 percent from 7 percent and German venture capital firm Holtzbrinck to 8 percent from 11 percent as they sold shares to Povlsen.
Kinnevik, which has been increasing its exposure to e-commerce, last year bought an additional 10 percent of Zalando at a price that valued the company at 2.8 billion euros.
Zalando has mirrored Amazon's strategy of spending heavily on advertising to boost brand awareness, and it also offers a free, but costly, return policy in all markets.
By: Emma Thomasson; Editing by Louise Heavens and Tom Pfeiffer