* Privalia to pay 150-200 mln euros - source
* Privalia raises 88 mln euros to help pay for the deal
* Privalia sees combined revenues of 400 mln euros in 2011
By Mark Potter
LONDON, March 7 Online fashion retailer Privalia
is buying Germany's Dress for Less to create a global leader in
the fast-growing internet clothing market, in a deal which one
person close to the matter said was worth 150-200 million euros
Privalia, a private online sales club with leading positions
in Spain, Italy, Brazil and Mexico, declined to say how much it
was paying for Dress for Less, which does not require customers
to be members to make purchases.
However, Privalia said on Monday it was raising 88 million
euros ($123 million) for the deal from private equity firms
General Atlantic, Highland Capital Partners, Index Ventures and
Insight Venture Partners.
It will also pay for the transaction with an undisclosed
amount of debt and shares, with the result that Dress for Less
founders and managing partners Mirco Schultis and Holger
Hengstler will become significant shareholders in Privalia.
Private equity owned Privalia, which is buying Dress for
Less from buyout firm Palamon Capital Partners, forecast the
combined company would achieve triple-digit percentage revenue
growth this year to around 400 million euros.
Online clothing retailers have enjoyed a boom in sales
growth during the economic downturn, as high-speed internet
connections have boosted the convenience of shopping remotely.
This has led major clothing store groups, such as Spain's
Inditex (ITX.MC) and Sweden's Hennes & Mauritz (HMb.ST), to step
up their investments online. [ID:nLDE67P212]
Swiss luxury goods group Richemont CFR.VX last year moved
to buy the 67 percent of British online fashion retailer
Net-a-Porter it did not already own. [ID:nLDE630040]
Privalia, which was founded in Spain in 2006 by Lucas Carne
and Jose-Manuel Villanueva and has over 6 million members, saw
sales leap 141 percent to 168.4 million euros in 2010.
That compares with the 223 million pounds ($363 million)
achieved by ASOS (ASOS.L), Britain's biggest pure online
clothing retailer, in the year ended March 2010.
ASOS itself is often tipped as a bid target for a clothing
store group, an online specialist such as Amazon (AMZN.O), or
for major Danish shareholder Bestseller. [ID:nLDE70G12T]
Italian online fashion retailer Yoox YOOX.MI reports 2010
results on Wednesday.
(Editing by Andrew Callus and Louise Heavens)