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Yahoo Japan to Take Over Top Fashion Retailer Zozo for $3.70 Billion

Yahoo Japan stated they would take over Japan’s top online fashion retailer Zozo Inc for 400 billion yen ($3.70 billion), aiming to breathe modern life into the website and upping its own game against competitors such as Amazon.com.

Zozo’s billionaire founder Yusaku Maezawa mentioned he would walk under as a chief executive and promote most of his stake after a collection of missteps which have stagnated the shares down around 60% over the past year.

The deal offers Yahoo Japan an opportunity to take the direction in Japan’s online fashion area where Amazon and Rakuten Inc have struggled to make headway, and the place Zozo’s mall Zozotown controls around 50% of the market for mid to high-end fashion.

It also comes as traders have grown increasingly wary about growth prospects for Zozo – a more inexpensive, Japan-focused version of Britain’s Farfetch Ltd – after a failed experiment with bespoke tailoring and clashes with manufacturers over discounting.

Yahoo Japan’s offer of 2,620 yen per Zozo share represents a premium of around 21% versus Wednesday’s closing value but is a 44% decrease than its peak around a year ago. Zozo’s stock ended up 13% on Thursday, whereas Yahoo Japan shares rose 2%.

The deal would give Maezawa a blessing of around $2.3 billion. He stated he would sell a stake of approximately 30%, leaving him with about 6% within the firm.

The entrepreneur is charged with creating a classy, user-friendly website over a decade ago at a time of dubiousness about whether or not 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.

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