D+S europe

Fashioning a successful investment in a growth sub-sector

D+S europe AG is a leading international e-commerce and customer service provider listed on the Deutsche Börse. The company’s e-commerce division provides the tools that enable some of the world’s biggest fashion names to maintain their competitive edge in the online sphere. The business looks after all of the elements involved in ensuring that customers get the best online treatment, including the design and operation of online shops, warehousing, delivery of goods, and payment processing. The customer service division provides essential call centre support to some of Germany’s largest companies and is now the country’s third-largest provider of value-added telephony services.

As an early mover in the supply of e-commerce solutions to the fashion industry, D+S europe has seen very rapid growth in this part of the business, and now dominates the European market in this very high-growth field. In 2007, fashion was the fastest-growing segment of the online retail market and D+S’s management expects the segment’s growth to continue at a double-digit pace, despite the general economic climate. This sector trend opened up enormous opportunities for D+S europe; so in late 2007, the company began looking for a partner who could offer the know-how and requisite financial strength to take advantage of this potential.

WhyApax? Apax Funds stood out because of their experience in the fashion industry through investments such asTommy Hilfiger, CBR Group and Calvin Klein, as well as their experience in the IT and business services sectors
and focus on growth buyouts.

As a result, D+S’s management team engaged with Apax Funds on an exclusive basis and in April 2008, the current Apax Europe VII fund acquired the shares of several legacy shareholders and at the same time submitted a voluntary acquisition tender to all other shareholders. The offer was unanimously recommended by the D+S Board and in early 2009 Apax Funds became the majority shareholder in D+S europe, holding over 90%of the company’s shares.

What about the future? Since the investment, CEO Achim Plate and his team have driven D+S europe’s growth in both lines of business: In 2008 total revenues rose by 29 per cent to €299 million. In addition to growing the existing e-commerce customers, the business has launched online sites for new customers including Hugo Boss and C&A. Around 40 new websites for fashion players are scheduled to launch in 2009, including the online shop for another Apax Funds portfolio company, Tommy Hilfiger.

In the field of call centre services, the company entered into a strategic partnership with DeutscheTelekom in 2008, under which Germany’s largest telecommunications company is transferring considerable customer service and back office operations to D+S.The call centres also serve as the foundation for corporate social responsibility activities at D+S. For years, the company has been one of the major sponsors of the Students Helping Life (SHL) non-profit initiative, which conducts its Social Day annually in Germany. On this day, students work for companies or private individuals for a good cause – in 2008, some 200,000 students from over 1,000 schools participated in this campaign, which was organised with the aid of a D+S call centre.

Source: Apax Partners Annual Report 2008