8-K: MySize Inc. Acquires Percentil Assets, Expanding into Circular Fashion and Re-Commerce

MySize Inc. expands into the circular fashion market by acquiring key assets of Percentil, a second-hand fashion marketplace, aiming for profitability and strategic alignment with EU regulatory changes.

Summary

• MySize Inc. has acquired key assets of Percentil, a managed marketplace for second-hand fashion, through its newly-formed subsidiary, New Percentil, S.L.
• The acquisition was completed on May 9, 2025, following insolvency proceedings of Percentil's former owner in Spain.
• The total purchase price was approximately $679,000, consisting of a $44,500 cash payment and the assumption of approximately $634,500 in customer and labor liabilities and debt.
• MySize expects the Percentil business unit to generate $1.5 million in revenues in the second half of 2025, projecting a 25% increase to MySize's total revenue.
• The acquisition includes warehouse infrastructure, logistics equipment, IT and electronic equipment, photography equipment, clothing display equipment, support supplies, and over 120,000 second-hand garments and accessories.
• MySize is also subrogating the labor contracts of 17 former Percentil employees, including the CEO and CMO.
• MySize intends to reposition Percentil as a premium marketplace focused on higher-value items and a premium re-commerce experience.
• The company is launching a B2B resale solution (Circularity as a Service) to enable brands to monetize overstock and returns.
• The acquisition aligns with upcoming EU regulations requiring formal reuse plans for garments.

Sentiment

Score: 8

Explanation: The document presents a positive outlook on the acquisition, highlighting its strategic benefits, revenue potential, and alignment with industry trends. The management's comments are optimistic, and the financial details suggest a sound investment.

Positives

• The acquisition provides MySize with a ready-made entry into the circular fashion market.
• The purchase price of approximately $679,000 is considered a minimal upfront investment.
• The acquired assets include valuable infrastructure, technology, and inventory.
• The acquisition is expected to increase MySize's total revenue by 25% in the second half of 2025.
• The 'Circularity as a Service' offering has the potential for recurring revenue streams and high-margin scalability.
• The acquisition positions MySize to benefit from upcoming EU regulations on textile circularity.

Negatives

• The acquisition was made following insolvency proceedings of Percentil's former owner, indicating potential past financial difficulties.
• MySize is assuming certain customer and labor liabilities as part of the acquisition.
• The success of the acquisition depends on MySize's ability to successfully integrate Percentil's operations and technology.

Risks

• The integration of Percentil's technology and operations may present challenges.
• The circular fashion market is competitive, and MySize will need to effectively differentiate Percentil to succeed.
• Changes in EU regulations could impact the demand for re-commerce platforms.
• The projected revenue of $1.5 million in the second half of 2025 may not be achieved.

Future Outlook

MySize expects the Percentil business unit to generate $1.5 million in revenues in the second half of 2025 and is focused on building a profitable, scalable, and sustainable circular fashion business.

Management Comments

• 'Our goal with Percentil is clear: build a profitable, scalable, and sustainable circular fashion business from day one,' said Ronen Luzon, CEO of MySize, Inc.
• 'We believe this to be a strategically sound and financially compelling acquisition,' said Ronen Luzon, CEO of MySize, Inc.
• 'Percentil gives us a front-row seat in this transformation,' Luzon added.

Industry Context

The acquisition aligns with the growing trend of circular fashion and re-commerce, driven by consumer demand for sustainability and upcoming EU regulations on textile waste. The total addressable market for second-hand and circular fashion in Western Europe is estimated to exceed $25 billion by 2027.

Comparison to Industry Standards

• The document mentions Vinted as a peer platform, suggesting that Percentil aims to outperform it in profitability and customer retention.
• The acquisition is strategically timed to align with major upcoming European Union regulations, similar to how other companies are adapting to meet environmental standards.
• The document references pilots with Springfield (Tendam Group) and C&A, indicating that Percentil's B2B resale solution is gaining traction among major retailers.

Management Changes

Legal Proceedings

• The acquisition occurred within the framework of insolvency proceedings of Casi Nuevo filed with Commercial Court No. 13 of Madrid (Spain).

Related Party Transactions

• Naiz Bespoke Technologies, S.L., a wholly-owned subsidiary of MySize, Inc., made a payment of 40,000 (approximately $44,500) for operational reasons.

Stakeholder Impact

• Shareholders: The acquisition is expected to increase revenue and profitability, potentially benefiting shareholders.
• Employees: 17 former Percentil employees have been transferred to New Percentil, ensuring job continuity.
• Customers: Percentil's customers will continue to have access to a marketplace for second-hand fashion.
• Suppliers: The acquisition may create new opportunities for suppliers in the circular fashion market.

Next Steps

• Integrate Percentil's technology, operations, and business into MySize.
• Reposition Percentil as a premium marketplace.
• Launch the 'Circularity as a Service' B2B resale solution.
• Integrate MySize's AI technology into Percentil's platform.
• Scale up sales of the over 120,000 quality-vetted garments.

Key Dates

Keywords

circular fashion, re-commerce, acquisition, Percentil, MySize, sustainability, B2B resale, AI-driven retail, second-hand fashion, EU regulations