One of Zalando’s two founders has insisted that no decision has yet been made on whether the German e-commerce giant will IPO, despite heightened speculation in recent months. Robert Gentz told the audience at Heureka on Tuesday that while going public was very much a possibility, there was no definitive news to report.
He said: “We consider this [an IPO] as an option, but there [are] actually no plans… no decisions have been made.”
Earlier this year, reports suggested the company had sought advice on a potential IPO from banks, with a value of €8.5 billion being tossed around.
Gentz was giving a rare interview at the startup-focused conference, which is part of Berlin Web Week. Zalando is one of Berlin’s biggest startup successes, having grown out of the Samwer brothers’ Rocket Internet incubator, and the lack of Rocket insiders talking in public meant his interview – conducted by Joel Kaczmarek, publisher (and previously editor) of Gründerszene – was eagerly anticipated.
Insights into the world of the Samwers, particularly the volatile Oliver, were sparse, although Gentz did confirm that Oliver had called him a “pussy” for not wanting to build a big TV company.
One interesting thread that did emerge was how difficult it can be to cope with the issues surrounding a large company, when it has grown from being a genuine startup in such a short period of time.
A case in point was an investigative report inApril by German TV station RTL, which sent an undercover reporter to experience the supposedly terrible conditions at Zalando’s logistics centre in Erfurt. The report described the working conditions as “a climate marked by constant fear,” with the journalist claiming to have walked 27 kilometres in one day and that one worker had actually died on-site because of the stress.
Questioned about the report, Gentz admitted that there were parts of the criticism which were correct, and that measures were being considered to address concerns including longer breaks and more seating in the warehouse, but also insisted that there were also many lies in the report – nobody had died in the logistics centre, and he said the RTL report was no longer available after Zalando went to court.
And part of the reason why such bad PR can come about is because of a lack of lobby power in such a young company compared to older rivals, Gentz argued: “If you found a startup and within five years it gets so big, you do not really have the time to develop a lobby. So in terms of connections, or if the media hits you, you do not really have anybody […] So I guess that the older companies which have like 50 or 60 years of experience, they have quiet a big network and they won’t get hit that hard.”
As for why Zalando proved to be so successful, Gentz said it was down to good timing and the market situation – and that in future, the company would concentrate on topics that don’t change; avoiding innovating in areas which are not dead certs.