‘An IPO can be quite a frustrating process,’ says Julia Stötzel, who was brought in by German e-fashion darling ABOUT YOU to take it public on the Frankfurt Stock Exchange, though she has recently left the company to launch her own consultancy.
‘It's really important to know why you’re doing all this, because it can be distracting from the original business.’
The firm had already enjoyed rapid growth when it decided the time was right to go public. ABOUT YOU was already prepared – and the timing of the firm’s June 2021 listing agreed – when Stötzel joined. The company has one of Europe’s biggest growth stories in online fashion. Hamburg’s first unicorn – with an aim to digitalize the shopping mall experience – has grown from its launch in 2014 to boast more than 45 mn active users per month across 26 markets.
‘Many of the analysts had already ordered from us, or their wives or daughters had,’ says Stötzel. The firm's biggest sales are in women's clothing.
Stötzel explains that the IPO made sense for three reasons: firstly, the firm wanted to raise funds ‘in order to finance further investments into our growth markets – such as our rest-of-Europe segment.
‘A second reason was general visibility for our partners’ – the company works with more than 3,500 brands to offer more than half a million items – ‘and being a publicly listed firm gives you much more credibility and makes it easier to do business with your partners.’
A third benefit for Stötzel is that the visibility also helps on the human capital front. ‘It helps in acquiring and retaining talent from an HR perspective,’ she says.
External and internal relations
Despite going public during the virtual-only stages of the Covid-19 pandemic, Stötzel says that while ‘it was rather strange to have investor meetings in a virtual-only format – IR is a people business as much as it is a financial function – it is so much more efficient to do an IPO with a solely virtual set-up.’
She did already know some of the investors buying into ABOUT YOU, however, so in some cases there was an existing relationship.
What were her priorities at the time? An IPO is a very external process and outside support is essential, but it is also very much an internal effort, points out Stötzel.
‘It’s super-important to have the right kind of set-up and internal support because, ultimately, IR is a function that takes various inputs and channels them out again,’ she says. ‘I did some teach-ins to educate internal departments on what it means to be publicly listed and why there was a new department asking lots of questions.’
Since going public – with six banks involved in the IPO covering the firm – analyst coverage has grown to nine at time of writing. And Stötzel says the IR approach is to be very open, whether or not those analysts cover the company.
‘Even if analysts are covering only our peers, [an open approach] helps them to understand the business model better, it helps to avoid misunderstandings in reports about our peers and it helps to strengthen our own relationship with those analysts,’ she says. ‘And if some of them are curious to hear more, if they have that capacity or want to initiate coverage somewhere down the line, then they will be much more up to speed than if they were just starting from scratch.’
IR for the next generation of investors
Does the firm have a strong retail following among its customers? Not really. While admitting this is somewhat surprising, Stötzel explains that being part of Germany’s SDAX index of smaller companies ‘that generally have less retail share than the DAX’ could play a part, as could the fact that ABOUT YOU has a relatively small free float of just 21 percent, with the firm owned by ‘two very big, strategic’ shareholders.
‘If a stock is not very liquid, it also tends to have a lower retail share,’ she points out. ‘But our approach at ABOUT YOU is definitely catering to the next generation of investors – and that includes retail investors. We believe they don't necessarily want to read through 100-page reports, but maybe they are interested in seeing a video summary of the results.’
Stötzel stresses that ABOUT YOU’s approach is not about replacing the reports, financials and press statements that still have an investor (and regulatory) role to play.
While the firm hasn’t quite gone TikTok – ‘we still need to keep it professional’ – it has produced short results videos, and co-founder and managing director Tarek Müller features on numerous podcasts.
Stötzel says ABOUT YOU has taken a ‘bold and modern’ approach to its IR materials and financial reports, too. ‘We are a young company and wanted to spice things up a little bit with formats that fit the DNA of the company,’ she explains.
This article originally appeared in the Fall 2022 issue of IR Magazine.