Shares of Zalando tumbled in early European trade after BaFin, Germany's financial supervisory authority, disclosed it had launched a review of the online fashion group's 2025 annual reporting to determine whether information linked to its acquisition of About You was omitted from the financial statement notes.
By 07:46 GMT the stock was down roughly 9% in early trading.
BaFin said it had found evidence suggesting Zalando may have breached accounting rules by not including details of a related-party transaction tied to the About You deal in the notes to its consolidated financial statements. The regulator said it is auditing the company's full-year accounts as of December 31, 2025, as well as the accompanying management report.
Zalando completed its takeover of About You in 2025. A company spokeswoman told the Wall Street Journal that Zalando had been informed about BaFin's review and that the firm believes all material information concerning the acquisition of About You shares was publicly available during the tender offer process.
"This is a purely formal and materially insignificant aspect of the notes to the financial statements," the spokeswoman said, adding that Zalando was in close dialogue with BaFin.
The announcement came as European markets pulled back from recent highs. The pan-European STOXX 600 fell 0.38% to 637.76, retreating from a record closing high reached in the prior session, although the index remained set for a weekly gain.
Technology names exerted downward pressure on the market, tracking weakness in the sector globally. Investors have been weighing the potential impact of surging memory chip costs driven by strong AI-related demand, a dynamic that has weighed on technology equities.
The market quotes and ticker movements included elsewhere in coverage showed mixed readings across instruments, including FXXPc1 -0.37%, ZALG -5.98%, SXP1TECE +6.88% and STOXX600. These reflect intraday swings as investors digested the regulatory announcement and sector developments.
No new facts about the acquisition timing were provided beyond the confirmation that Zalando completed the takeover of About You in 2025. The regulator's audit focuses on whether the related-party aspects of the transaction were appropriately disclosed in the notes to the 2025 consolidated financial statements and on the accompanying management report as of December 31, 2025.
Zalando's comment characterized the issue as formal and immaterial and noted ongoing engagement with the regulator. Beyond that statement and BaFin's notification of a review, the public record included in this report contains no further detail about the nature of the evidence BaFin cited or any potential remedial steps the company might take.
Investors and market participants will be watching for further updates from BaFin or Zalando that clarify the scope and findings of the review, though no timeline for the regulator's work was disclosed in the announcements referenced here.