Japanese billionaire Yusaku Maezawa sold 50.1% slice in the online fashion retailer Zozo Inc. to Yahoo Japan, a subsidiary of Softbank, in a deal worth JPY 400.7 (USD 3.7 billion) or JPY 2620 per share. The company has gone through some bumpy period and this acquisition might help it recover. Let us take a closer look at the business and a person who brought it to life, Yusaku Maezawa.
Competing with the leaders
Mr. Maezawa started the website Zozotown back in 1998 under the name “Start Today” and it is now the largest online fashion retailer in Japan. With this acquisition, Yahoo Japan can expand its e-commerce business and compete with such massive players as Amazon and Rakuten. Zozo controls almost half of the middle and high-end fashion market. Thus, Yahoo Japan can potentially jump straight to a prime position in the online fashion retail industry in the country.
Forbes estimates Yusaku Maezawa to be worth USD 2.2 billion.
Financial recovery
For Zozo, it is a chance to get out of downward motion. The company suffered declines in annual earning due to the poor performance of Zozosuit: a skintight suit that was supposed to take precise body measurements using a mobile app and based on them ensures that clothes bought online are a perfect fit for shoppers who are not sure about what size to take.
However, the feature did not meet the estimates and was shut down in March 2019 with only 3 million suits shipped before it happened. Moreover, several other brands operating under the Zozo umbrella have left being unhappy about the discounting policies.
What is next?
Mr. Maezawa stepped down from his position as a Chief Executive Officer. Yet, he still gets JPY 240 billion (about USD 2.3 billion) out of this deal by selling 30% out of his 36% stake. His stepping down and succession by Mr. Kotaro Sawada might stem from the fact that the lavish lifestyle of the flamboyant entrepreneur and his courage to try new things like Zozosuit dragged down the company’s share prices by 60%. (Let us not forget the time when he gave away JPY 100 million to Twitter users as New Year’s money known as onendama to celebrate Zozotown’s JPY 10 billion revenues during Christmas and New Year season).
Moreover, Mr. Maezawa is known to be very passionate about art. He has a private collection that includes a painting of Jean-Michel Basquiat costing USD 110 million and runs a Contemporary Art Foundation. However, recent events have apparently affected the financial situation of the eccentric entrepreneur judging by the news of him selling a significant part of his collection at Sotheby’s to raise funds.
It is unclear what this money will be used for. At the press conference dedicated to Zozo’s acquisition, Mr. Maezawa announced that he is starting a new business. However, he did not specify what kind of business exactly.
Bloomberg reports that he might be launching “a foot-measuring device called Zozomat”. Mr. Maezawa also mentioned that he has to train for his Moon trip as a private passenger with Elon Musk’s SpaceX mission. Later he tweeted “I myself will be setting off on a new path”.
We are curious to find out what his next step will be and will keep updating the information on the new ventures of Mr. Maezawa.
"Otsumami" - a bite size snack:
Yahoo Japan is now a powerful rival of Amazon and Rakuten in the fashion retail industry.
