You are here

Yahoo Japan to take over online fashion retailer Zozo

Its founder is to step down and sell most of his stake, following missteps that have tanked firm's share price

Yusaku Maezawa created the trendy, user-friendly website over a decade ago, at a time of scepticism about whether Japanese consumers would buy clothes online.


YAHOO Japan Corp has said it will take over Japan's top online fashion retailer Zozo Inc for 400 billion yen (S$5.09 billion), breathe fresh life into the website and up its own game against rivals such as

Zozo's billionaire founder Yusaku Maezawa said he will step down as chief executive and sell most of his stake after a series of missteps which have dragged the company's shares down by around 60 per cent in the past year.

"I will entrust Zozo to a new president and take my own path," the flamboyant businessman and former punk bank member said in a Twitter post.

The deal offers Yahoo Japan a chance to take the lead in Japan's online fashion space, where Amazon and Rakuten Inc have struggled to make headway, and where Zozo's mall Zozotown controls around half the market for mid- to high-end fashion.

Your feedback is important to us

Tell us what you think. Email us at

The development comes as investors have grown increasingly wary about growth prospects for Zozo - a more affordable, Japan-focused version of Britain's Farfetch Ltd - after a failed experiment with bespoke tailoring and clashes with brands over discounting.

Yahoo Japan's offer of 2,620 yen per Zozo share represents a premium of around 21 per cent of Wednesday's closing price; however, it is 44 per cent lower than its peak around a year ago. Zozo's stock ended up 13 per cent on Thursday; Yahoo Japan's shares rose 2 per cent.

Yahoo Japan said it aims to buy 50.1 per cent of the online fashion retailer, whose market value was 680 billion yen at Wednesday's close, before Yahoo's offer, Refinitiv data showed.

The deal would give Mr Maezawa a windfall of around US$2.3 billion. He said he will sell a stake of around 30 per cent, leaving him with about 6 per cent in the company.

The entrepreneur created the trendy, user-friendly website over a decade ago at a time of scepticism about whether Japanese consumers would buy clothes online. The site, whose early stores included A Bathing Ape, Hysteric Glamour and United Arrows Ltd, still has few rivals.

In recent years, it is Mr Maezawa's lifestyle that has attracted attention. Known for dating celebrities and driving fast cars, he stands out among rich executives in Japan who mostly avoid ostentatious displays of wealth.

He signed up as the first private passenger to be taken around the moon by Elon Musk's SpaceX, and paid US$110 million for a Jean-Michel Basquiat painting. But fortunes have recently turned for him and for Zozo; he recently sold part of his extensive art collection at Sotheby's, saying he had no money.

Zozo booked its first annual earnings decline in the last financial year, due mainly to a failed made-to-measure service. It had distributed skin-tight bodysuits for consumers to upload their measurements, but ended up with few orders and huge costs.

Zozo has also been hit by the departure of several brands, some unhappy with its discounting policies and others wanting to create their own e-commerce services. In March, it said it secured a 15 billion yen commitment line from banks.

With Mr Maezawa's departure, Zozo will be led by director Kotaro Sawada, the companies said.

Earlier in the decade, Mr Maezawa launched an unsuccessful e-commerce business in China with fellow Japanese entrepreneur Masayoshi Son, chief executive of SoftBank Group Corp. The technology conglomerate controls telco SoftBank Corp, the consolidated subsidiaries of which include Yahoo Japan, which will change its name to Z Holdings Corp next month.

Yahoo Japan's takeover of Zozo comes at a time of change in Japanese tech, where Rakuten is launching wireless telecom services in a direct challenge to SoftBank's cash-cow business and Amazon made an aggressive push into fashion.

It also comes at a turbulent time for Yahoo Japan, which recently ousted the chief executive of another investment, retailer Askul Corp, over lacklustre results. Askul has requested Yahoo Japan dissolve its capital ties. REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to