According to The Japan Times, Yahoo Japan, a subsidiary of tech giant SoftBank, will pay ¥400.7bn ($3.7bn) to take a 50.1% stake in Zozo for ¥2,620 ($24) per share.
Zozo’s founder and CEO, the flamboyant Yusaku Maezawa, is understood to have agreed to sell a 30% stake in the company to Yahoo Japan. Director Kotaro Sawada will replace him as CEO so Maezawa can “pursue a new path”, as he put it in a Twitter post.
Maezawa, who is worth $2.2bn according to Forbes, does not fit the conventional mould of Japanese executives and has courted publicity over his high-profile romances, his $110m purchase of a Jean-Michel Basquiat painting and for being named as the first private passenger due to be flown around the Moon with Elon Musk’s SpaceX company.
The 43-year-old once played in a punk band, but he made his fortune in the fashion world after launching a user-friendly website, Zozotown, which proved a hit with young Japanese consumers.
However, the company recently had to post a 20% year-on-year decline in annual net profits, the Financial Times reported, after the failure of its Zozosuit, a skin-tight bodysuit that was supposed to revolutionise online retail by providing consumers with a made-to-measure service.
Several brands have also ceased using Zozo, partly because they wanted to create their own e-commerce capabilities, but also over disquiet about Zozo’s discounting policies.
However, coming at a time when US retail giant Amazon is pushing strongly into fashion, analyst Mitsushige Akino said he expected Zozo to benefit from Yahoo Japan’s extensive financial resources.
“It’s a plus for Yahoo Japan and would help expand their e-commerce operations,” he said. “Zozo gets the financial back up it needs for its new venture and overseas expansion.”
Sourced from The Japan Times, Financial Times; additional content by WARC staff