Key Takeaways:
Germany's financial watchdog BaFin opened an investigation into Zalando's 2025 accounts Friday, citing possible omissions of related-party disclosures tied to its 1.13 billion-euro acquisition of About You.
The regulator said it had concrete indications the online fashion retailer may have breached accounting regulations by failing to disclose details of a transaction with a related party in the notes to its consolidated financial statements. BaFin said it would publish the outcome of its investigation regardless of whether it ultimately finds any errors.
Zalando shares fell 6% by 0824 GMT, wiping out a 5% gain since the start of the year. "At first glance, this seems more like a technical glitch," a trader told Reuters. "There is some uncertainty, but it doesn't seem to be that serious."
Zalando said it was in close and constructive dialogue with BaFin on the matter. The company described the probe as covering a "purely formal and materially insignificant aspect" of the notes, adding all relevant information about the About You deal was already fully public as part of the tender offer. Zalando completed the acquisition of its smaller rival last year in a deal valued at 1.13 billion euros ($1.29 billion).
The investigation centers on whether Zalando omitted information about a related-party transaction in connection with the About You acquisition from the notes to its 2025 consolidated financial statements and management report. BaFin did not provide further details on the specific transaction or parties involved.
The probe adds regulatory uncertainty for Zalando as it integrates About You, which it acquired to strengthen its position against fast-fashion rivals such as Shein and Inditex's Zara. The German online fashion market has faced intensifying competition, with consumers shifting toward lower-cost alternatives and discount platforms. Zalando's 2025 annual report, filed with the German electronic Bundesanzeiger, is now subject to BaFin's review, with any potential restatement or fine depending on the investigation's findings.
This article is for informational purposes only and does not constitute investment advice.
