Opening the Sesame of Retail Valuation: An empirical study of valuation discrepancies between E-commerce and Brick-and-Mortar apparel retailers

Sammanfattning: This study enquires into the potential valuation differences between listed E-commerce and traditional Brick-and-Mortar apparel retailers, as well as the underlying factors explaining the discrepancy. Publicly available financial data was used to analyze the historical relationships between the variables. We find significant differences in valuation multiple means between the two groups. Furthermore, we used the profitability and growth dimensions to explain the differences in valuation multiple means. The results support our hypotheses that Return on Assets, EBITDA margin, Total asset turnover and Revenue growth are statistically significant in explaining the existent differences in valuation multiples. These findings lead to several critical implications and pave the way for further research on the matter.