* Co says no decision yet on possible float
* Investor Kinnevik's figures value business at over $5 bln
* Zalando says FY sales up 52 pct to 1.76 bln euros
* Pace slows to 36 pct in fourth quarter
* Co says mild winter forces discounting of seasonal ranges
(Recasts with financial sources on possible IPO)
By Emma Thomasson
BERLIN, Feb 14 Europe's biggest online fashion
retailer Zalando, long seen as a possible flotation candidate,
is talking to bankers about a possible listing, sources said,
confirming impetus behind a plan that could value the company at
more than $5 billion.
Speaking after Zalando had reported slowing sales growth in
the second half of 2013 as a mild winter led to high levels of
discounting, financial sources said the company is looking for
banks to advise on a stock market flotation later this year.
But Rubin Ritter, a member of the management board of
lossmaking Zalando, told Reuters an initial public offering
(IPO) - which could be western Europe's biggest technology
offering since Germany's T-Online in 2000 - was a
possibility, not an immediate priority.
"An IPO could be an interesting option going forward but
right now there is no decision on this topic," Ritter said.
Among the favourite banks for a role in a flotation are
JPMorgan, Goldman Sachs and Morgan Stanley
, seen as specialists in technology-related listings, but
banking sources said Zalando would have to move quickly if it
wanted to organise a listing before the summer holidays.
The Berlin-based retailer, whose rivals include
Britain-based ASOS Plc, started selling shoes in
Germany five years ago and now ships 1,500 different brands to
customers in 15 countries.
Zalando's biggest investor, Swedish firm Kinnevik
, said it valued its 36 percent stake in Zalando at
12.14 billion Swedish crowns ($1.9 billion), suggesting the
whole company is worth more than $5 billion.
Kinnevik shares, which have almost doubled in the last year
due to its investments in fast-growing e-commerce, were down 8.6
percent after the Zalando figures showed a slowdown in sales in
the most recent quarter.
Sales rose 52 percent to 1.76 billion euros ($2.4 billion)
in 2013 as a whole, with the seven new markets it entered in
summer 2012 helping drive first-half growth of over 70 percent.
The pace however slowed to 42 percent in the third quarter and
36 percent in the fourth.
ASOS shares, which had jumped 144 percent in a year, slipped
after it said retail sales growth slowed to 38 percent in the
four months to Dec. 31, compared with 47 percent in the fourth
quarter of its 2012-13 year.
Yet underlying trends may still favour internet-oriented
Market research firm Mintel estimates online sales made up
about 9.9 percent of Europe's clothing and footwear spending in
2013, or about 38 billion euros, up from 8.6 percent in 2012.
"We expect growth in online sales of clothing and footwear
to outperform the overall e-commerce market in 2014," said
Mintel retail analyst John Mercer.
However, pure online retailers like ASOS and Zalando are
facing increasing competition as established brands like H&M
and Inditex expand their e-commerce offerings.
Data last month showed Zalando saw a sharp slowdown in the
growth of visitors to its website in December, but Ritter said
that did not fully reflect booming use of mobile devices, which
now account for over 35 percent of Zalando website visits.
"Our traffic is still growing quite considerably so we have
100 million visits per month, which makes us the most-visited
fashion website outside China," he said.
Zalando said it was breaking even in its core markets of
Germany, Austria and Switzerland, where it made more than 1
billion euros of sales in 2013.
Its operating margin improved by 0.5 percentage points from
minus 7.2 percent in 2012, but Ritter said that was less than
hoped due to the late start of the summer and a mild winter that
forced fashion retailers to discount seasonal styles.
Ritter declined to say when the business might turn a
profit, but said Zalando, which has advertised heavily to win
market share, would spend less on marketing as a percentage of
sales and keep expanding higher-margin private-label brands,
although it has no immediate plans to move into new countries.
Zalando, which changed its structure in December to one
typically used by German listed companies, said Kinnevik
Chairwoman Cristina Stenbeck will take over as chair of its
supervisory board from Kinnevik Chief Executive Mia Brunell, who
is stepping down from the Swedish group.
Also joining the board is Lothar Lanz, chief financial
officer of German publisher Axel Springer, which is
preparing its own listing of its online classified advertising
($1 = 0.6030 British pounds)
($1 = 0.7317 euros)
($1 = 6.4650 Swedish crowns)
(Additional reporting by Mia Shanley in Stockholm and Alexander
Huebner in Frankfurt; Editing by Erica Billingham and David