Yahoo Japan Steps to Supervise E-Tailer Zozo Clothing

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Recently, Yahoo Japan Corp indicated it would take charge of Japan’s top online fashion e-tailer Zozo Inc. It has a revenue of over 400 billion yen ($3.70 billion).

In addition, it is aiming to bring new ideas into the website and increase its own game versus rivals such as

Yusaku Maezawa, Zozo’s billionaire founder, stated he would resign as the chief executive of the company.

Moreover, he will sell most of his shares after a sequence of errors which have pulled down the stocks to around 60% over the past year.

In a Twitter post, the flamboyant businessman and former punk bank member said, “I will entrust Zozo to a new president that will take my path.”

The contract proposes Yahoo Japan an opportunity to take the lead in Japan’s online fashion space. This is where Amazon and Rakuten Inc have fought to make progress.

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It is also where Zozo’s mall aka Zozotown operates around 50% of the market for mid- to high-end fashion.

Meanwhile, as investors have grown progressively cautious about growth prospects for Zozo, a more affordable Japan-focused version of Britain’s Farfetch Ltd came up.

It was after an unsuccessful experiment with customized tailoring and conflicts with brands over discounting happened.

Yahoo Japan’s deal of 2,620 yen per Zozo share signifies a premium of around 21% versus Wednesday’s closing price. Around a year ago, it is 44% lower than its peak.

On Thursday, Zozo’s stock closed up 13%, while Yahoo Japan shares grew 2%.

Meanwhile, at Wednesday’s close, Zozo’s market value was at 680 billion yen. This was before Yahoo’s offer, Refinitiv data showed.

Yahoo Japan then stated it seeks to buy 50.1% of Zozo.

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The deal would provide Maezawa a dividend of around $2.3 billion.

Leaving him with as much as 6% in the company, he stated he would sell a stake of around 30%.

Over a decade ago, the entrepreneur received acknowledgment with establishing a popular, user-friendly website.

It was built at a time of uncertainty regarding whether Japanese consumers would buy clothes online.

The site, whose new stores comprised A Bathing Ape, Hysteric Glamour, and United Arrows Ltd, still has few competitors.

In the recent years, it is Maezawa’s lifestyle that has drawn attention. He is known for dating celebrities and driving fast cars.

He also stands out among wealthy executives in Japan who mostly prevent showy demonstrations of wealth.

Maezawa signed up as the first private traveler to be taken around the moon by Elon Musk’s SpaceX. Moreover, he paid $110 million for a Jean-Michel Basquiat painting.

However, fortunes have recently set for Zozo and Maezawa. It is when the businessman recently sold part of his vast art collection at Sotheby’s, exclaiming he has no money.

In the last financial year, Zozo reported its first annual earnings has declined. This is due mainly to an unsuccessful made-to-measure service.

It has delivered skin-tight bodysuits to let consumers upload measurements. On the flipside, it has ended up with few sales and huge costs.

Moreover, Zozo has also been hit by the departure of numerous brands. Some were unhappy with its discounting policies, and others want to create their e-commerce services.

In March, it has indicated it secured a 15-billion-yen commitment line from banks.

Meanwhile, in a statement, the companies said Zozo will be guided by director Kotaro Sawada after Maezawa’s exit.

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