Arabian Centres signed a share purchase agreement to buy 39,250 shares, or 25.5% of VogaCloset Ltd. for a total consideration of $18.36 million (SAR 68.85 million), the company said in a joint statement. Under the deal, ACC will acquire a total of 13,600 shares of VogaCloset’s outstanding shares and will inject $12 million (SAR 45 million) in additional capital.
Alhokair will also buy 39,250 shares of VogaCloset’s outstanding shares, translating to an ultimate ownership of 25.5% of VogaCloset after raising its capital.
Alhokair and Arabian Centres will self-finance the acquisition from its internal resources. The deal value will be paid in cash to VogaCloset shareholders, when the amended memorandum of association is signed, according to the regulatory rules.
VogaCloset, the owner and operator of the www.vogacloset.com, is a UK-based online fashion store offering the latest women, men and kids trends from the runways directly to the closets of fashion enthusiasts in the Middle East.
The following table illustrates VogaCloset’s financial statements from 2018 to 2020:
VogaCloset’s financial statements in the last three years
Revenue (SAR mln)
Net Profit/ (Loss) (SAR mln)
The agreement is guaranteed by the ordinary securities and pledges provided by sellers. Both Arabian Centres and Alhokair will have two seats in the board of directors. It will also grant the right to the company to waive its privileges to any member in its group.
According to the agreement, the current sellers and shareholders, including the representatives of the buyer’s executive management, will continue to receive earn-out incentives, based on the evaluation of their shares held in the three years following the acquisition deal. Financial incentives are based on certain requirements, which will be fulfilled under the agreement in terms of certain performance levels, along with a maximum limit of such extra payments in all cases.
The parties to the agreement will have a share sale and purchase agreement that will come into effect within three years from the deal completion date for the remaining shares of VogaCloset’s selling shareholders, pursuant to the terms of similar deals and as agreed under the acquisition deal.
VogaCloset will continue to be independently operated by its founding administrative and executive team, which includes the chief executive officer, chief operating officer and board chairman. The company will continue managing and operating the e-commerce platform online.
Arabian Centres and Alhokair added that the deal will allow it to access a leading international platform with strong presence in the Middle East and Saudi Arabia.
The acquisition aims to accelerate the implementation of their digital transformation strategy to meet the growing demand for omni-channel retail experiences, specifically designed to fulfill the ever-changing needs of shoppers in the Kingdom.
Arabian Centres noted that it expects the deal to provide synergies to develop an integrated comprehensive channel for both shoppers and tenants, and enhance the regional e-commerce footprint of VogaCloset that has traffic of more than 12 million users from the Middle East.
Meanwhile, Alhokair said that the acquisition will leverage on Vogacloset’s asset light and customer centric business model, efficient logistics chain and deep understanding of regional and global fashion trends to extend its leadership position in the Saudi market and broaden its brands’ geographical reach. .
Arabian Centres and Alhokair indicated that the acquisition will not have a direct impact on its obligations, expecting the deal to reflect positively on its financial results starting Q1 FY2022 onward. In addition, it forecasts sales growth for the tenants that have their brands on the platform.
It added that the signing of the agreement does not mean the completion of the deal, as it is still subject to fulfillment of the requirements stated in the disclosure letter. The company will announce the closure of the deal or any other updates in due course.
“In line with our ambition to develop the first digital retail platform in the Kingdom, our partnership with VogaCloset will significantly enhance the comfort of our tenants and mall footfall through involving them in our business system," Faisal Aljedaie, CEO of Arabian Centres, said.
"This partnership will be a great value for our business as it will allow us to provide more comprehensive services to our mall tenants, in addition to helping their brands to have wider presence online," Aljedaie said.
He added that his company will provide its mall footfall with a specialized and top-notch loyalty program, as well as simplified and innovative consumer financing solutions. "We are excited for the partnership with Alhokair and VogaCloset as it represents a new chapter in our business."
Arabian Centres will enhance the online services provided to the tenants of its malls and will offer them an additional sales channel. Meanwhile, the VogaCloset platform will be improved and expanded to provide a superior online or even offline experience through unified supportive logistical channels.
"This acquisition will also distinguish VogaCloset from its regional peers by providing unique features such as “buy online", "collect from store,” and "buy online and return to store,” the CEO said.
On the other hand, Marwan Moukarzel, CEO of Alhokair, said: “Our investment in the online shopping platform VogaCloset is an important move in the transformation process and a great opportunity to boost our business."
He added that this strategic acquisition of a large regional shopping platform is the direct way for Alhokair to strengthen its leadership in the Saudi market, through shifting from traditional to online shopping, while maintaining its competitive position in the market.
"We affirm that we will remain committed to our digital integration program to become a shopping destination of choice. We also look forward to introducing a range of brands online that is unmatched in the Saudi retail space, addressing our growing customer demand for a genuinely omnichannel experience, and giving our brands extended reach," Moukarzel concluded.