German financial regulator BaFin has launched an investigation into Zalando’s 2025 financial accounts over potential breaches of disclosure rules related to its €1.1 billion acquisition of rival online retailer About You. The inquiry centers on whether Zalando adequately disclosed a related-party transaction involving Danish billionaire Anders Holch Povlsen, who was reportedly a significant shareholder in both companies prior to the takeover.
BaFin stated it had “concrete indications” that relevant information may not have been fully reported in Zalando’s annual report. According to individuals familiar with the matter, the investigation focuses on Zalando’s failure to reveal Povlsen’s dual shareholder status, tied to his investment company Heartland. Povlsen is also the owner and CEO of Bestseller, a fashion group with brands such as Jack & Jones, Vero Moda, and Only, and is noted as a major stakeholder in UK online retailer Asos. Bestseller declined to comment on the issue.
The takeover, announced at the end of 2024, saw Zalando securing binding agreements for around 73 percent of About You’s shares from key investors including the German Otto Group and Heartland before publicly offering to acquire the company. Zalando maintains that all critical details about the acquisition—such as the involved parties, transaction structure, and purchase price—were disclosed as part of the takeover offer documentation.
Zalando responded to the investigation by describing the matter as “purely formal and immaterial,” referencing notes to the accounts rather than substantive omissions. The company also emphasized its cooperation with BaFin during the review process.
Prior to the regulator’s announcement, Zalando’s shares had experienced a substantial rise of more than 40 percent since mid-May, buoyed by better-than-expected first-quarter results and early gains from employing artificial intelligence to reduce marketing and logistics expenses. Yesterday, the stock declined by over 7 percent following news of the probe.
The acquisition of About You is part of Zalando’s strategy to expand scale and better compete with fast-growing Chinese rivals such as Shein. Zalando has projected that integrating About You will lead to annual cost savings of approximately €100 million by 2028. Additionally, the company plans to leverage About You’s expertise in influencer marketing to more effectively respond to evolving fashion trends.
As the investigation continues, Zalando’s financial disclosures and corporate governance practices will likely remain under scrutiny, with potential implications for how related-party transactions are reported in Germany’s online retail sector.