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MySize Inc. Acquires Key Assets of Percentil: A Strategic Move into Circular Fashion

In a significant move aimed at expanding its influence in the sustainable fashion sector, MySize Inc. (NASDAQ: MYSZ) has announced the acquisition of key assets from Percentil, a renowned managed marketplace for second-hand fashion. This acquisition marks the formation of New Percentil, S.L., a wholly owned subsidiary based in Spain. With operations across multiple European countries including Spain, France, Germany, and Italy, Percentil was positioned as a premium player in the re-commerce space before encountering insolvency issues under its previous ownership.

Emphasis on Sustainable Fashion

MySize's acquisition aims to enhance its business-to-business and business-to-consumer offerings while promoting sustainable practices through high-quality second-hand items. The managed marketplace model that Percentil employs ensures product quality, leading to higher resale values and better experiences for both buyers and sellers. This strategic move is not only about adding a new business unit; it signifies MySize's commitment to adapting to consumer preferences for quality and authenticity in fashion, especially as regulatory pressures around sustainability increase across Europe.

Strategic Shift Towards Profitability

Post-acquisition, MySize plans to reposition Percentil as a premium marketplace that focuses on higher-value items. This strategic shift is designed to align with consumer demands for elevated experiences in buying second-hand fashion, which is reflected in their goal to create a sustainable business model from the outset. CEO Ronen Luzon has articulated that the focus is not on rapid growth but rather on smart scaling that can yield positive EBITDA results from the beginning.

Financial Insights of the Acquisition

The total value of the acquisition is approximately €610,000 (around $679,000), comprised of a cash payment and the assumption of certain liabilities. This acquisition is financed through current cash reserves, ensuring that MySize maintains a strong financial position without incurring additional debt or issuing new shares. Expected revenues from Percentil are projected to reach $1.5 million in the latter half of 2025, translating to a substantial 25% increase in MySize's total revenue, alongside improved profitability for the overall group.

Embracing 'Circularity as a Service'

Through this acquisition, MySize is set to launch a new B2B resale solution dubbed 'Circularity as a Service'. This innovative offering allows fashion brands to monetize their overstock and returned items by integrating with Percentil's platform. This scalable model meets the needs of major retailers seeking compliance with upcoming EU legislation that mandates formal reuse plans for garments. Initial piloting with brands like Springfield has already validated the demand for this service within the market.

Synergies and Technological Integration

The acquisition of Percentil paves the way for MySize to leverage its existing portfolio companies. For instance, Naiz Fit, which offers sizing solutions to reduce returns, will connect seamlessly with Percentil, optimizing the entire resale ecosystem. Coupled with MySize's advanced artificial intelligence technology, enhancements in pricing, product recommendations, and user experience are on the horizon. This technological backbone aims to boost customer satisfaction while streamlining operational efficiency.

Preparing for regulatory shifts

The timing of this acquisition could not be more strategic, as it aligns with new European Union regulations set to enforce sustainability in the textile industry. These regulations will require brands to adopt recycling, reuse, and reduction practices. This positioning not only supports compliance but also enhances the business model of Percentil, which is uniquely designed to thrive in a sustainable economy. According to industry reports, the second-hand market in Western Europe is expected to exceed $25 billion by 2027, highlighting the growing appeal of re-commerce.

In summary, MySize's acquisition of Percentil represents a forward-thinking strategy that intertwines sustainability with profitability in the fashion sector. By creating a premium circular fashion marketplace and introducing innovative solutions for brands to manage inventory effectively, MySize is set to reshape its role in the fashion industry's future. With an eye toward regulatory alignment and market demand, MySize stands on the brink of transformation in how fashion is marketed, sold, and consumed.