Emaar Malls Group has agreed to acquire a 51 per cent stake in fashion e-commerce site Namshi for $151m, marking the latest move by Emirati billionaire Mohamed Alabbar in the space.
In a statement, the company said the agreement included investment in Namshi for future growth with shareholder Global Fashion Group, a company backed by Germany’s Rocket Internet, retaining the remaining 49 per cent stake.
Both sides have agreed to jointly develop the company until a possible listing or full transfer of ownership.
Emaar Malls will support the site with access to fashion brands, the ability to further develop its logistics infrastructure and help expand its footprint in adjacent countries, according to the statement.
“The acquisition of a majority stake in Namshi underlines our digital-driven strategy to leverage the growing e-commerce market in the Middle East and North Africa region. Namshi offers a perfect fit for Emaar Malls in accelerating its focus on multi-channel retailing, and creating long-term value for its stakeholders,” said Alabbar, who is chairman of Emaar Malls and Emaar Properties.
Namshi is one of the Gulf region’s earliest e-commerce players having launched in 2012. The site now offers 50,000 products and has 750,000 customers across the UAE, Saudi Arabia, Qatar, Kuwait, Oman and Bahrain, with products shipped from a warehouse in Dubai.
The company had net revenue of Dhs555m last year, which was also its first full-year of profitability and positive cashflow, according to the statement.
The all-cash deal is expected to close within three months.
Earlier this year, Emaar Malls tried and failed to scupper US online shopping giant Amazon’s acquisition of the region’s leading e-commerce site Souq.com with a late $800m bid.
The bid followed Alabbar’s announcement of $1bn e-commerce platform noon.com the previous year in partnership with Saudi Arabia’s Public Investment Fund.
However, noon has yet to officially launch having missed its previously announced January opening date.
Last week it was reported that the chief executive of the company, Fodhil Benturquia, was among staff members to leave in recent weeks.
This was followed by confirmation yesterday that the firm’s chief technology officer, JadoPado founder Omar Kassim, had also left just weeks after an Alabbar-led technology fund acquired his site and integrated its team into noon.
Alabbar said on May 16, before Kassim’s resignation, that the site was on track to launch this year but would move its base to Riyadh.
The Emirati, who made his name at Emaar, also has several other e-commerce plays going after acquiring a large stake in regional venture capital fund Middle East Venture Partners last Thursday.
He has also entered a $138.5m joint venture deal with international online luxury fashion retailer Yoox Net-A-Porter to setup a business in the Middle East that will begin initial operations next year.
It was unclear whether Namshi would be integrated into this competing offering or that of noon.com.