Emaar Malls Group is to acquire a majority stake in the Dubai-based online fashion retailer Namshi for US$151 million (Dh554.6m), wrapping up its hunt to land a significant e-commerce asset, after it tried to buy Souq.com earlier this year.
It bought the 51 per cent stake from Rocket Internet’s Global Fashion Group, which retains a 49 per cent holding.
"The acquisition … underlines our digital-driven strategy to leverage the growing e-commerce market in the Middle East and North Africa region," said Mohamed Alabbar, the chairman of Emaar Malls and its parent, Emaar Properties. "Namshi offers a perfect fit for Emaar Malls in accelerating its focus on multichannel retailing and creating long-term value for its stakeholders," said Mr Alabbar.
Five-year old Namshi made its first annual profit last year on revenues of Dh555m – which indicates it was valued at a multiple of 1.95 times net revenue. Namshi offers more than 50,000 fashion products and accessories across the Gulf region, with a same-day delivery service in the UAE. It was co-founded by Hosam Arab, Faraz Khalid and Hisham Zarka.
As part of the deal, Emaar Malls will develop Namshi’s logistics infrastructure and help its geographical expansion while Global Fashion Group will continue its support.
The e-commerce space is experiencing a bewildering pace of change this year, sparked by Amazon’s purchase of Souq in March, despite an attempted 11th-hour, higher bid of $800m from Emaar Malls.
Since then Mr Alabbar has been a prolific deal maker.
At the beginning of this month, his Noon.com venture bought market platform JadoPado and last week a fund led by Mr Alabbar took a stake in Middle East Venture Partners (MEVP).
Other physical retailers are also moving in, with Majid Al Futtaim Holding last week taking an equity stake in logistics provider Fetchr, and that may not be the end of the digital rush.
"I believe we will see some deals being tied up over Ramadan," said Philip Bahoshy, the founder of the tech investment tracker Magnitt. "We will see a busy June and then a quiet Summer with Q4 seeing more activity as funds begin to deploy their investments."
Emaar Malls recorded a net profit of Dh539m in the first quarter of this year, up by 2 per cent from a year-earlier period. The Dubai Mall, Dubai Marina Mall, Souk Al Bahar, Gold & Diamond Park and community shopping centres welcomed more than 34 million visitors in the first three months of the year, an increase of 10 per cent over the same period in 2016.