Zalando under investigation by German regulator over 2025 accounts linked to About You acquisition

The regulatory trigger

On Friday, BaFin announced an investigation into Zalando's consolidated financial statements for the year ended December 31, 2025, along with the management report. The watchdog said it had concrete indications that information regarding a transaction with a related party in connection with the acquisition of About You may have been incorrectly omitted from the notes to the accounts. The probe sent Zalando shares sharply lower in early trading.

concrete indications that the company may have breached accounting regulations

Share price reaction

Zalando's stock plunged as much as 20% in Tradegate premarket trading before partially recovering. By the time the Xetra exchange opened, the decline had narrowed to just over 9%, and later settled around a 6% loss in Frankfurt. The drop erased all the gains the stock had made since the start of the year. A trader told Reuters the matter seemed like a technical glitch and not serious.

At first glance, this seems more like a technical glitch. There is some uncertainty, but it doesn't seem to be that serious.

The related-party question

Two people familiar with the matter told the Financial Times that the review centres on Zalando's failure to disclose in its 2025 annual report that Anders Holch Povlsen was a significant shareholder in both companies before the takeover. Povlsen, who controls the fashion group Bestseller and investment company Heartland, had committed his stake ahead of the public offer. The Otto Group was also among the investors that pledged support. BaFin's formal examination will assess whether the omission breached disclosure rules.

Zalando's response

Zalando acknowledged the probe and said it was in close and constructive dialogue with BaFin. The company characterised the issue as a purely formal and materially insignificant aspect of the notes to the financial statements, adding that all relevant information about the acquisition was already publicly available in the tender offer document. The review, it said, has no impact on its financial KPIs or performance.

According to Zalando SE's assessment, this is a purely formal and materially insignificant aspect of the notes to the financial statements.

Analyst view and broader context

Barclays analyst Andrew Ross said the probe created an unhelpful headline but remained convinced it is a solvable issue. He warned that the review would hang over the stock as an overhang until BaFin concluded. The investigation coincides with a broader sell-off in technology stocks, with European chipmakers also falling sharply. Zalando is integrating About You as it faces competition from Chinese rivals such as Shein, aiming for €100mn in annual cost savings by 2028.

until BaFin concludes, the review will hang over the stock as an overhang