Fashion sale nets 40% IRR for Palamon

In its seventh exit in the last year, growth investor Palamon has sold an online fashion retailer to Spanish strategic buyer Privalia.

Palamon Capital Partners has sold online fashion retailer dress-for-less to a trade buyer, General Atlantic-backed Privalia Venta Directa. The exit will generate an internal rate of return of 40 percent for Palamon, said Holger Kleingarn, a partner at the firm, in a statement.

Dress-4-less: smart exit

Financial details were not disclosed, but several media sources have pegged the enterprise value of the business at €200 million. Palamon originally invested in dress-for-less in 2007.

Dress-for-less is a Germany-based online fashion retailer, selling end-of-season designer clothing. Following Palamon’s investment in the company, it installed a new logistics facility and IT infrastructure. Revenue has grown 35 percent year-on-year since 2007, said Palamon in a statement.

This is Palamon’s seventh realisation in the last 12 months, the most recent of which was the €500 million sale of Loyalty Partner to American Express in December 2010, which generated a 3x return on Palamon’s invested capital. 

Privalia was launched in 2006 and is headquartered in Spain. In April last year the company raised €70 million from two new investors, General Atlantic and Index Ventures, having previously secured funding from Highland Capital Partners.