Business overview
NA-KD was founded in 2015 and is a global fashion online retailer based in Gothenburg, Sweden. The company mainly targets generation Y and Z with high focus on paid social and influencer marketing
The founder, Jarno Vanhatapio, previously founded Nelly.com, another leading online fashion retailer
In NA-KD, eEquity recognised a driven and target-oriented founder and team having achieved outstanding traction with key customer cohorts and a sophisticated approach towards fast-fashion with a modern ESG-rooted focus. Despite high competition, eEquity was able to secure the deal due to industry credibility, proven track-record and our entrepreneurial approach
The company is deemed well-positioned to both drive and ride on the migration from offline to online and to disrupt the fast fashion business model to focus on reusable fabrics, selling pro-owned items and to continue to build the brand though paid social and influencer marketing globally. NA-KD is selling in 80 countries every month
eEquity invested in Jan 2017 with SEK 158 million in sales compared to 2 billion in 2020. In Q3’21, NA-KD grew LTM revenues by 26%, with a (5%) LTM EBITDA margin
How we have built the company and enhanced the value
- Moved from retailing other brands to selling nearly only private label
- Continue the strong brand building through use of social media, high volume of influencers and PR
- Localise the site in countries where demand is high, to enable paid marketing and SEO in own language
- Larger focus on social merchant collections, learning from early mistakes by being better at analysing follower base loyalty and purchasing power
- Data driven purchasing and inventory management to optimise supply after demand
- Move of warehouse to continental Europe to enable faster delivery globally as well as constantly evaluating further warehouse locations and automation to when demand is large enough to support cost
- Define the business processes and ensure sufficient IT support and establish a more proactive finance
- Strengthen team with key recruitments
Many of our investment criteria were met when we invested in NA-KD:
- Digital business model
- Sales between SEK 50-200 million
- Strong organic revenue growth and high gross margins
- Strong and coachable management team
- Strategic fit with portfolio
- Potential to generate over 5.0x of invested capital
- Wow-factor
Historic sales development
Sales developments (SEKm)
Key strategic initiatives and value creation
Organisation has been built from 25 to 250 people comprising 40 nationaliaties with a fully-fledged senior management team
Data-driven purchasing and strategic inventory management to optimise supply after demand with “Product Coverage Ratio” implemented. 20,000 new products are designed yearly. New fully automated Autostore warehouse in Landskrona
ESG initiatives, including ESG reporting and recyclable materials - to be climate neutral by 2025. Large successful effort in selling pre-owned items
Continued strong brand-building through social media channels and high focus on influencers. Data driven marketing based on incrementality with new attribution models
Redesigning business processes and microprocesses based on simplicity, scalability, automation and incrementality. Implementation of data warehousing and BI team.
Since eEquity’s first investment, NA-KD has grown >13x