“Going public can be quite a frustrating process,” says Julia Stötzel, who was taken public by German e-fashion darling ABOUT YOU, although she recently left the company to start her own consulting firm.
“It’s really important to know why you’re doing all this because it can distract from the real business.”
Julia Stötzel, formerly
from ABOUT YOU
The company was already growing rapidly when it decided it was the right time to go public. When Stötzel got involved, ABOUT YOU was already prepared – and the date of the stock exchange listing in June 2021 was agreed. The company has one of Europe’s biggest growth stories in online fashion. Hamburg’s first unicorn – aiming to digitize the shopping mall experience – has grown to more than 45 million monthly active users in 26 markets since its launch in 2014.
“Many of the analysts had already ordered from us or their wives or daughters,” says Stötzel. The company generates most of its sales with women’s clothing.
Stötzel explains that the IPO made sense for three reasons: First, the company wanted to raise funds “to finance further investments in our growth markets – such as our “Rest-of-Europe” segment.
“A second reason was the overall visibility for our partners” – the company works with more than 3,500 brands to offer more than half a million items – “and being a public company gives you a lot more credibility and makes it easier to to do business with you partner.’
A third benefit for Stötzel is that the visibility also helps on the human capital front. “From an HR perspective, it helps attract and retain talent,” she says.
External and Internal Relations
Despite going public during the purely virtual phases of the Covid-19 pandemic, Stötzel says that while it was “quite odd to only hold investor meetings in a virtual format – IR is as much a people business as it is a finance function – it’s so much more efficient to have a to carry out an IPO exclusively virtually.’
However, she already knew some of the investors who bought into ABOUT YOU, so that in some cases a relationship already existed.
What were your priorities back then? An IPO is a very external process and support from outside is essential, but also a lot of personal work, emphasizes Stötzel.
“It’s extremely important to have the right kind of setup and internal support, because ultimately IR is a function that takes in various inputs and feeds them back out,” she says. “I did some teach-ins to educate internal departments on what it means to be public and why there was a new department that asked a lot of questions.”
Since going public — with six IPO banks covering the company — analyst coverage has grown to nine at the time of writing. And Stötzel says the IR approach is very open as to whether or not those analysts cover the company.
“Even if analysts only cover our competitors, [an open approach] helps them better understand the business model, it helps avoid misunderstandings in reports about our colleagues, and it helps strengthen our own relationship with these analysts,” she says. “And if some of them are curious to hear more, if they have that capacity or want to initiate coverage at some point later, then they’ll be much better informed than if they were just starting from scratch.”
IR for the next generation of investors
Does the company have a strong retail following among its customers? Not really. While Stötzel admits that this is somewhat surprising, he explains that the inclusion in the German SDAX index of smaller companies “which generally have a lower retail share than the DAX” could play a role, as could the fact that ABOUT YOU has a relatively small free float of just 21 percent, with the company being owned by “two very large, strategic” shareholders.
“If a stock isn’t very liquid, it also tends to have a lower retail exposure,” she points out. “But our approach at ABOUT YOU is definitely aimed at the next generation of investors – and that includes private investors. We don’t think you’ll necessarily want to read 100-page reports, but you might be interested in seeing a video summary of the results.’
Stötzel emphasizes that ABOUT YOU’s approach is not about replacing the reports, financial data and press releases that still play an investor (and regulatory) role.
Though the company hasn’t quite left TikTok — “we still have to keep it professional” — it has produced short earnings videos, and co-founder and CEO Tarek Mueller has appeared on numerous podcasts.
Stötzel says ABOUT YOU has also taken a “bold and modern” approach to its IR materials and financial reports. “We’re a young company and wanted to spice things up with formats that fit the company’s DNA,” she explains.
This article originally appeared in IR Magazine Fall 2022 issue.
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