2Yr·

𝐀𝐛𝐨𝐮𝐭 𝐘𝐨𝐮 - 𝐓𝐞𝐜𝐡-𝐁𝐮𝐝𝐞 𝐭𝐚𝐫𝐧𝐭 𝐬𝐢𝐜𝐡 𝐚𝐥𝐬 𝐅𝐚𝐬𝐡𝐢𝐨𝐧-𝐌𝐚𝐫𝐤𝐭𝐩𝐥𝐚𝐭𝐳

Yes, you read that right. Donkey is doing something away from crypto for a change. First company introduction from me.

𝐭𝐥;𝐝𝐫

Buy.

𝐀𝐛𝐨𝐮𝐭 𝐘𝐨𝐮 ... 𝐢𝐬𝐭 𝐝𝐚𝐬 𝐧𝐢𝐜𝐡𝐭 𝐝𝐢𝐞𝐬𝐞 𝐊𝐥𝐚𝐦𝐨𝐭𝐭𝐞𝐧𝐰𝐞𝐛𝐬𝐢𝐭𝐞?

Right. About You (https://www.aboutyou.de/) offers fashion companies a marketplace to sell their products online, competing directly with companies like Zalando. The focus is on the individual customer experience - the platform is About You. In addition to clothing from major fashion brands, About You also offers fashion from its own labels [1] and second-hand goods [2] on its platform. In total, there are more than 400,000 items from over 2,000 brands in the assortment [3]. Especially the promise of personalization (e.g. live shopping events, inspiration through content, ...) and the idea of sustainability through the second-hand sector should appeal to the young target group.

But actually About You is a tech company that happens to sell clothes. The self-developed store platform Scayle (https://www.scayle.com/de/), on which About You is based, is licensed by About You to other companies as a SaaS solution (Software as a Service). Customers include fashion brands such as Marc O'Polo as well as companies from other industries such as Depot or baur [4]. With Hypewear, a platform for digital fashion is also under construction [5]. There, everything revolves around NFTs (sorry, I can't do without crypto after all). The free group is happy about a free fashion NFT at https://www.hypewear.io/.

𝐖𝐚𝐬 𝐦𝐚𝐜𝐡𝐭 𝐀𝐛𝐨𝐮𝐭 𝐘𝐨𝐮 𝐟ü𝐫 𝐝𝐢𝐜𝐡 𝐳𝐮 𝐞𝐢𝐧𝐞𝐦 𝐊𝐚𝐮𝐟?

Primary Scayle. Of course, there are shopping platforms like sand on the sea. For example, there are providers such as Shopify, which is primarily aimed at smaller customers (but also offers a product for corporations with Shopify Plus), or Salesforce, which offers a complex platform for large customers with its Commerce Cloud. Scayle is more in competition with platforms like the Salesforce Commerce Cloud. This means that we are talking about a powerful store system, which is introduced into a company in a relatively complex way (information about you: 3-6 months, but realistically more like 6-18 months) and is then also set there for the time being. A replacement is associated with correspondingly high costs and effort, which is why no company will tackle this lightly. In addition, there are often long-term contracts. This is therefore a subscription model whose annual revenue per customer is more likely to be in the 6-7 digit range - no comparison to the 3-4 digit revenues that platforms like Shopify (without Plus) generate per customer.

Of course, customers can still replace the store system with appropriate investments. To attract and ultimately retain customers, About You has to offer a very good product. And here we are at the second reason to buy. About You actively uses its own platform itself to sell clothing. In other words, About You learns firsthand how the platform performs in everyday life, can directly observe customer behavior, and has a strong interest in developing the platform in the right direction. This is no comparison to providers whose primary product is the store system itself.

𝐆𝐞𝐧𝐮𝐠 𝐠𝐞𝐬𝐜𝐡𝐰𝐚𝐟𝐞𝐥𝐭, 𝐡𝐚𝐮 𝐦𝐚𝐥 𝐞𝐢𝐧 𝐩𝐚𝐚𝐫 𝐃𝐚𝐭𝐞𝐧, 𝐙𝐚𝐡𝐥𝐞𝐧, 𝐅𝐚𝐤𝐭𝐞𝐧, ... 𝐫𝐚𝐮𝐬!

About You is part of the Otto Group, headquartered in Hamburg, Germany. The company was founded in 2014, now employs about 1,000 people, is present in 23 European markets, but does not operate in Ukraine and Russia [6]. Since the IPO in June 2021, there have been no insider trades, except for a purchase in April 2022 [7]. The stock has fallen over 50% since its IPO debut, resulting in a market capitalization of approximately 1.75 billion euros. With over 60% of the shares, the Otto Group is the largest shareholder. The three members of the Executive Board together hold a good 7% of the shares [8].

According to the preliminary annual results, revenue grew by about 50% to approximately 1.75 billion euros in the financial year 2021 / 2022. This revenue growth was also enabled by many strategic investments, (one-off) marketing measures and European expansion, which put pressure on the profit. Adjusted EBITDA will be approx. -65 million euros or approx. -3.5%. In fiscal 2020/21, adjusted EBITDA was still -35.5 million euros or -3%. The goal is to reach profitability in fiscal year 2023/24 and to achieve sales of 5 billion euros in 2025/26. About You is already operating profitably in its core markets, Germany, Austria and Switzerland. The particularly interesting B2B business with Scayle has also been profitable since this fiscal year, but despite strong growth it has so far only contributed a small part to group sales (Q3: just under 10% of group sales by Scayle). [9] [10] [11]

The next annual report will be published on May 24, accordingly there are no current and official key figures yet. Based on the preliminary report, the P/E ratio should be around 1. I repeat: a growth tech stock with KUV of 1. Just saying.

𝐖𝐢𝐞 𝐬𝐭𝐞𝐭𝐬 𝐮𝐦 𝐝𝐢𝐞 𝐊𝐨𝐧𝐤𝐮𝐫𝐫𝐞𝐧𝐳?

Phew, I honestly have a hard time with this question. As currently most of the revenue is generated with the marketplace, obvious competitors are Zalando, ASOS and co. For the future, however, I see a gigantic opportunity for Scayle. In this case, Salesforce with its Commerce Cloud would be a competitor, but it actually operates in a different environment. About You can certainly also be compared with Amazon as a marketplace company that also makes its self-developed technology available to other companies. Yes, sometimes I'm a bit of a megalomaniac.

𝐖𝐚𝐬 𝐬𝐚𝐠𝐞𝐧 𝐞𝐢𝐠𝐞𝐧𝐭𝐥𝐢𝐜𝐡 𝐌𝐞𝐧𝐬𝐜𝐡𝐞𝐧 𝐳𝐮 𝐀𝐛𝐨𝐮𝐭 𝐘𝐨𝐮, 𝐝𝐢𝐞 𝐦𝐞𝐡𝐫 𝐀𝐡𝐧𝐮𝐧𝐠 𝐚𝐥𝐬 𝐝𝐮 𝐡𝐚𝐛𝐞𝐧?

Nobody has more of a clue than me, but well: the shareholder advises not to reach into the falling knife - among other things because Tarek Müller, one of the co-CEOs, has announced that he wants to become mayor of Hamburg in 2030 [12]. Vincent of The Motley Fool sees this very info as no-news and the stock, with its growth and market prospects, as correspondingly attractive [13]. The Motley Fool, in the form of Henning Lindhoff, also praised About You's long-term bullish outlook back in March [14]. The price targets from the end of March / beginning of April are all extremely bullish and range between 19 and 36 euros (Deutsche Bank, Goldman Sachs, UBS, Jefferies, JP, Baader) [15].

𝐖𝐞𝐥𝐜𝐡𝐞 𝐑𝐢𝐬𝐢𝐤𝐞𝐧 𝐬𝐢𝐞𝐡𝐬𝐭 𝐝𝐮?

Mainly the current market environment with rising interest rates and inflation. In this, About You has already been massively punished, but of course it can go down even further. Since About You is close to profitability and has a strong group in the background with the Otto Group, I don't really see a problem here. However, the market is unfortunately not very interested in what I think is a problem and what is not.

In general, of course, the fashion market is highly competitive. If prices rise overall, the new T-shirt will probably be even more dispensable than the bread at the bakery. Even as a lifestyle product, clothing is coming under increasing attack from the latest technology gadgets. Material and transport bottlenecks are doing the rest. Nevertheless, About You's concept is likely to appeal to a target group that is enthusiastic about fashion and also spends money on it regularly. Nevertheless, there is of course a certain risk here.

Since my investment case is based on Scayle, it would be catastrophic if it does not work out. For example, because About You delivers a bad product, loses interest in Scayle or no new customers can be acquired. However, I think all three scenarios are unlikely. The Otto Group is very open about the technologies and procedures it uses, and anyone who follows it a bit, for example in its blog [16] or at various tech conferences, will quickly see that the technology should have a solid foundation. I have already mentioned the end customer orientation through the use of the platform in their own store, the user-friendliness of the tools for B2B customers is - from my point of view - also excellent and no comparison to the sometimes somewhat old-fashioned competition. Since Scayle is growing strongly and is also profitable [11], it cannot be assumed that About You will treat Scayle stepmotherly in the future. In addition, the first new customers have already been confirmed for 2022/23 [11].

𝐁𝐢𝐬𝐭 𝐝𝐮 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐞𝐫𝐭?

Yes, I've been in almost from the beginning and have regularly been in the falling knife since then. From just under 26 euros to 11.50 euros, all prices were there. And I will continue to buy.

𝐖𝐚𝐬 𝐰𝐚𝐫 𝐝𝐨𝐜𝐡 𝐠𝐥𝐞𝐢𝐜𝐡 𝐰𝐢𝐞𝐝𝐞𝐫 𝐝𝐞𝐢𝐧𝐞 𝐩𝐞𝐫𝐬ö𝐧𝐥𝐢𝐜𝐡𝐞 𝐄𝐦𝐩𝐟𝐞𝐡𝐥𝐮𝐧𝐠, 𝐝𝐢𝐞 𝐠𝐚𝐫𝐚𝐧𝐭𝐢𝐞𝐫𝐭 𝐤𝐞𝐢𝐧𝐞 𝐀𝐧𝐥𝐚𝐠𝐞𝐛𝐞𝐫𝐚𝐭𝐮𝐧𝐠 𝐢𝐬𝐭?

Buy.

Sources

[1] https://corporate.aboutyou.de/de/about-us/own-labels

[2] https://www.aboutyou.de/h/second-love/

[3] https://ir.aboutyou.de/download/companies/58027/Pressreleases/220329_ABOUT_YOU_mit_starkem_vorlaeufigen_Q4_und_Jahresergebnis_2021_2022.pdf

[4] https://www.scayle.com/de/kunden

[5] https://corporate.aboutyou.de/de/presse/hypewear-digital-fashion-by-about-you-das-fashion-tech-unternehmen-gruendet-eine-plattform-fuer-digitale-fashion

[6] https://www.ottogroup.com/de/ueber-uns/konzernfirmen/AboutYou.php

[7] https://www.finanzen.net/insidertrades/about_you

[8] https://ir.aboutyou.de/websites/about-you/German/2000/aktie.html

[9] https://ir.aboutyou.de/websites/about-you/German/3010.html?newsID=2224747