German pet supplies e-commerce platform Zooplus is seeking a new owner and is adjusting its valuation downward to facilitate the sale. The company experienced disappointing sales in 2023 and anticipates similar growth for the current year.
In 2021, investor groups Hellman & Friedman (H&F) and EQT acquired Zooplus for €3.7bn, taking it private. However, they now believe it is an opportune moment to transfer ownership, as reported by Lebensmittel Zeitung.
The annual report indicates that the investors have revised their expected sales proceeds, lowering the valuation range from €3.1-4.1b in 2022 to a new range of €2.7-3.8b. This adjustment reflects a broader trend of declining valuations among comparable retailers.
If the sale does not yield satisfactory returns, the investors are considering a potential return to the stock market in 2026, a task that will fall to the next CEO following the unexpected departure of Geoffroy Lefebvre in late November after just two years in the role.
Zooplus continues to grapple with significant financial losses. Although the company nearly doubled its adjusted EBITDA from €42.7m to €80.4m last year, it still reported a pre-tax loss of €110.5m. This loss was partly attributed to the closure of a warehouse, which resulted in impairments totalling €141m.
Despite a 12% increase in net sales to €2.7b, Zooplus fell short of its growth target of 14%, which mirrored the previous year's performance. For the current year, the company is projecting a similar 12% sales growth, aiming to surpass three billion euros, along with a significant increase in EBITDA.
Zooplus operates in over 30 European countries, including key markets such as Germany, France, the United Kingdom, Spain, and Italy, offering localized online shops tailored to regional customer preferences. The company provides a comprehensive range of pet products, including food, accessories, and specialty items like organic or hypoallergenic options.
Zooplus also offers private-label brands, such as Concept for Life and Wolf of Wilderness, catering to specific dietary needs at competitive prices. Its services include subscription-based ordering, loyalty programs (e.g., ZooPoints), and multilingual customer support, ensuring convenience and customer retention.
The company's competitors include Fressnapf/Maxi Zoo, one of Europe’s largest pet retail chains with a strong omnichannel presence, and Pets at Home, which dominates the UK market with both physical stores and an online platform. Additionally, Amazon poses significant competition due to its vast logistics network and ability to sell a wide range of pet products at competitive prices.
Other competitors include smaller regional online retailers and niche direct-to-consumer brands, which often focus on premium or specialized pet supplies. Zooplus differentiates itself as a pure-play e-commerce retailer with a Pan-European focus, offering localized websites, private-label brands, subscription services, and a loyalty program to retain customers in an increasingly competitive landscape.
The pet supplies and retail sector has witnessed several notable private equity transactions recently. In February 2024, TDR Capital acquired a majority stake in UK-based pet retailer Jollyes for approximately £130 million, aiming to invest in lower prices and accelerate store openings to compete with rivals like Pets at Home.
In 2023, private equity and VC investments in the pet care, food, and supplies sector surged to $2.89 billion, marking a 659% year-over-year increase. This growth was significantly driven by Blackstone Inc.’s acquisition of Rover Group Inc., an online marketplace for pet care, in a deal valued at nearly $2.15 billion.
Additionally, in July 2024, Pondera Holdings explored selling its controlling stake in Whisker, the maker of self-cleaning cat litter boxes, potentially valuing the company at close to $1 billion.
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