Saudi Arabia's listed retailer Fawaz Abdulaziz AlHokair, which owns the franchise for brands such as Zara and Banana Republic, and mall operator Arabian Centres Company will acquire a combined 51 per cent stake in Vogacloset, a UK-based e-commerce platform with 12 million users in the Middle East. The buyers will initially acquire 41.2 per cent of the e-commerce platform’s existing shares based on a pre-money valuation of $60 million, subject to an earn-out structure conditional on certain growth thresholds, the two companies said on Wednesday. The coronavirus pandemic has accelerated the pivot of traditional retailers to digital channels to maintain business continuity as safety-conscious shoppers flocked online during the health crisis. The move will accelerate the digital transformation of AlHokair and ACC. They will inject $12m into Vogacloset to further develop its presence in Saudi Arabia, the Arab world's largest economy, while growing its customer base and supporting the integration of AlHokair brands and ACC tenant brands onto the e-commerce platform, the statement added. The transaction is expected to be completed by the end of June, pending the fulfilment of conditions. “This strategic investment in a sizeable and profitable regional e-commerce player is the most direct route for AlHokair to extend its leadership position in its core Saudi market – from offline to the online space, while safeguarding our competitive market position,” Marwan Moukarzel, chief executive of AlHokair, said. ACC raised 2.47 billion riyals ($660m) in an initial public offering on the Tadawul Stock Exchange in 2019. Vogacloset will continue to operate independently and will maintain the management and operations of the platform. The executive team, including the chief executive, chief operating officer and executive chairman, will lead the business for at least five more years, according to the statement. A board of directors will be formed and comprise seven members: two nominated by ACC, two nominated by AlHokair and three nominated by the executive shareholders. “Partnering with AlHokair and ACC in Saudi Arabia, our key market, is a strategic leap for us,” Hanin Hamarneh, chief executive of Vogacloset, said. “This partnership, and the new investment that it will bring, will support and accelerate the execution of our very ambitious growth plans in Saudi Arabia and the Middle East.” The e-commerce company, which was founded in London in 2013, “is likely to be integrated with a joint venture formed by AlHokair and ACC to support the development of future opportunities aimed at building the two leading Saudi retail players’ omni-channel experience”. The two companies also plan to launch a loyalty programme, along with a consumer finance offering, the statement added. Vogacloset has grown its sales at a compound annual growth rate of more than 70 per cent since 2015. The platform sells products in Saudi Arabia and other markets, including the UAE, Kuwait, Qatar, Jordan and Iraq.