BlackRock makes equity investment in Grupo Axo
Grupo Axo, a leading Latin American multi-brand retail platform and partner to global fashion brands, has secured an equity investment from funds and accounts managed by BlackRock.
Grupo Axo will leverage the new funds to continue its expansion across Latin America as a premier brand steward and operator, with a particular focus on continuing the expansion of its digital channels. The funds and accounts managed by BlackRock join Grupo Axo’s global investor base, including existing shareholder General Atlantic.
Grupo Axo’s differentiated platform encompasses a diversified brand ecosystem underpinned by nearly three decades of experience as a multichannel operator and distributor of internationally-recognised brands, including Calvin Klein, Tommy Hilfiger, and Victoria’s Secret, among others. Grupo Axo holds licenses and exclusive distribution rights to a broad portfolio of 20 global brands, nine owned brands, and one non-exclusive partnership with Nike in Mexico. The business operates across four business divisions, spanning Full-Price, Off-Price, Athletics, and Privalia, a subscription based, off-price online marketplace. This multichannel platform provides Grupo Axo with the unique opportunity for control across the full spectrum of the product lifecycle, from merchandising at the beginning of a season through end-of-season discounting. Grupo Axo’s portfolio has also been specifically curated to anticipate and respond to the fashion and price-point preferences of different market segments.
Grupo Axo’s investments in its digital channels meaningfully accelerated the growth of the business over the past year despite a downturn in the broader retail sector as a result of the Covid-19 pandemic. The company’s digital channel grew 8.5x in 2020, with digital sales representing 31 per cent of Grupo Axo’s consolidated sales in 1Q21. Grupo Axo’s momentum is also supported by recent key strategic acquisitions, including Tennix SA de CV, which operates TAF stores in Mexico, in 2018, and Privalia’s Latin America online platform (ex-Brazil), in 2019.
Andres Gomez, co-CEO at Grupo Axo, says: “We are honoured to welcome funds and accounts managed by BlackRock to our investor base as we focus on the sustained growth of the business in Latin America and across channels. Over the past year, the acceleration of our digital offering, combined with our omnichannel strategy, has consolidated Grupo Axo’s position as a key e-commerce fashion player in the region. We are energised by the potential for Grupo Axo to continue strengthening our expertise and footprint as the partner of choice for global brands operating in Latin America.”
Russ Steenberg, Managing Director and Global Head of BlackRock Private Equity Partners, adds: “Grupo Axo is strongly positioned as a premium brand steward and brings expertise in the retail ecosystem across Mexico and Latin America. We believe the business has significant whitespace to scale and capture additional opportunity across retail channels and segments. We are pleased to join a high-quality investor group and look forward to partnering with Andres, Alberto, and the highly experienced Grupo Axo management team to fuel the continued growth of the business.”
Luis Cervantes, General Atlantic Managing Director, Head of the Mexico City Office, and Grupo Axo Board Director, adds: “Over the nearly four years of our partnership together, Grupo Axo has remained intently focused on the growth of its business, seeking to provide a seamless shopping experience across all online and offline channels, and leveraging its integrated model to support each brand’s specific needs. We look forward to our continued partnership with the Grupo Axo team, and are thrilled to welcome funds and accounts managed by BlackRock, as we focus on further deepening the company’s differentiated digital capability set and omnichannel platform.”
At the same time as the closing of the investment by funds and accounts managed by BlackRock, Grupo Axo will separately ratify Andres Gomez as Chairman of the Board and CEO, and Alberto Fasja will be confirmed as Board Member and strategic member of the company. The transaction is subject to customary closing conditions. Additional terms of the deal were not disclosed.