Japan’s largest online fashion retailer Zozo Inc will be taken over by Yahoo Japan Corp in a deal worth 400 billion yen ($3.7 billion),, the later said. This move will help the online fashion retailer to make additions and innovations to its business in order to compete with the companies such as Amazon.com.
Over the last year, Zozo had implemented a series of missteps that have resulted in the market share of the company being lost and its market value dropping by over 50 per cent from the peak it had reached last year at $14 billion. This has prompted the founder of the company, Yusaku Maezawa, to announce that he would relinquish the post of chief executive and sell off most of his stake in the company.
The value of the Japanese online fashion market is 1.8 trillion yen and Yahoo Japan will have the change to instantly become the leader in this market with the completion of the deal. Zozo’s mall Zozotown has a market share of around 50 per cent ranging from the mid- to high-end fashion segments while the likes of Amazon and Rakuten Inc have not been able to take on a leadership position.
In recent times, there has been loss of investor confidence in the growth potential of Zozo after the company unsuccessfully experimented with bespoke tailoring and got into tussle with other brands over discounts.
“My style may have been too top-down... It was the right time for a new CEO,” Maezawa, a former punk band member, said at a news conference, in which he began crying as he thanked shareholders and employees.
The deal offer from Yahoo Japan translates into 2,620 yen per Zozo share which is 21 per cent higher than the share value of Zozo as of closing of trading on Wednesday. The news sparked an increase of 13 per cent in Zozo stocks on Thursday in Japan while the shares of Yahoo Japan rose by 2 per cent.
The Japanese tech industry scenario is also undergoing changes with wireless telecom services is being launched by Rakuten which will make it a direct rival to SoftBank Group Corp’s cash rich telecom business while an aggressive push into fashion has been made by Amazon.
Yahoo Japan is a subsidiary of SoftBank and is controlled by the Japanese investment firm’s telecoms unit SoftBank Corp and the name of the company is to be changed to Z Holdings Corp next month.
Maezawa stands to make gains of about $2,3 billion from the deal, based on his announcement of his intention of selling about 30 per cent of the stake in Zozo. That will mean that the founder will only have about 6 per cent of the company with him after the deal.
It was more than a decade ago that a trendy, user-friendly website was created by the entrepreneur even though there was skepticism about Japanese consumers choosing to purchase clothes from inline sources. And currently that are very few rivals of the website, whose early stores included A Bathing Ape, Hysteric Glamour and United Arrows Ltd.
(Source:www.reuters.com)
Over the last year, Zozo had implemented a series of missteps that have resulted in the market share of the company being lost and its market value dropping by over 50 per cent from the peak it had reached last year at $14 billion. This has prompted the founder of the company, Yusaku Maezawa, to announce that he would relinquish the post of chief executive and sell off most of his stake in the company.
The value of the Japanese online fashion market is 1.8 trillion yen and Yahoo Japan will have the change to instantly become the leader in this market with the completion of the deal. Zozo’s mall Zozotown has a market share of around 50 per cent ranging from the mid- to high-end fashion segments while the likes of Amazon and Rakuten Inc have not been able to take on a leadership position.
In recent times, there has been loss of investor confidence in the growth potential of Zozo after the company unsuccessfully experimented with bespoke tailoring and got into tussle with other brands over discounts.
“My style may have been too top-down... It was the right time for a new CEO,” Maezawa, a former punk band member, said at a news conference, in which he began crying as he thanked shareholders and employees.
The deal offer from Yahoo Japan translates into 2,620 yen per Zozo share which is 21 per cent higher than the share value of Zozo as of closing of trading on Wednesday. The news sparked an increase of 13 per cent in Zozo stocks on Thursday in Japan while the shares of Yahoo Japan rose by 2 per cent.
The Japanese tech industry scenario is also undergoing changes with wireless telecom services is being launched by Rakuten which will make it a direct rival to SoftBank Group Corp’s cash rich telecom business while an aggressive push into fashion has been made by Amazon.
Yahoo Japan is a subsidiary of SoftBank and is controlled by the Japanese investment firm’s telecoms unit SoftBank Corp and the name of the company is to be changed to Z Holdings Corp next month.
Maezawa stands to make gains of about $2,3 billion from the deal, based on his announcement of his intention of selling about 30 per cent of the stake in Zozo. That will mean that the founder will only have about 6 per cent of the company with him after the deal.
It was more than a decade ago that a trendy, user-friendly website was created by the entrepreneur even though there was skepticism about Japanese consumers choosing to purchase clothes from inline sources. And currently that are very few rivals of the website, whose early stores included A Bathing Ape, Hysteric Glamour and United Arrows Ltd.
(Source:www.reuters.com)
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