Japanese billionaire and online fashion store Zozo founder Yusaku Maezawa has acquired stakes in Japanese apparel retailers United Arrows and Adastria.
Maezawa spent JPY3.5bn ($32.78m) for an 8% stake in United Arrows and JPY3.9bn for a 6% stake in Adastria. These investments mark Maezawa as the third-largest shareholder for both companies.
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By GlobalDataThe acquisitions were made for investment purposes with the possibility that Maezawa may “make proposals or offer advice to management” if needed in the future.
Spokespeople for the newly-acquired retailers said that they had been informed of Maezawa’s stake in advance of the disclosure. This is something required in Japan by law once a shareholder’s stake breeches over 5%. The retailers are yet to hear of specific proposals from Maezawa.
A spokesperson for Maezawa declined to comment to news sources.
United Arrows and Adastria both sell products on Zozotown, which Maezawa founded and sold last year to the Japan-based SoftBank Group for JPY400bn ($3.7bn). He also sold 30% of his personal stake to Yahoo Japan and retained an 18% stake in the fashion site.
Struggling retail in Japan
United Arrows and Adastria, like many retailers in Japan, have seen struggling share prices due to the Covid-19 coronavirus pandemic. The acquisition could prove beneficial to the retailers.
United Arrows is projecting an operating loss of JPY5bn-7bn this year. Shares in the retailer have been down by 57% since the beginning of 2020. Adastria, meanwhile, has seen a decline of 35%.
Bloomberg Intelligence analyst Catherine Lim said: “Zozo’s ex-CEO could advise on the digitisation of supply chains. Successful transformation of traditional supply chains that facilitate offline-online sales could help raise both companies’ competitive edge and longer-term profitability.”
According to a survey conducted in Japan published by Statista, around 82.8% of business enterprises in the retail industry said that they have experienced an impact on corporate activities due to the Covid-19 coronavirus pandemic.
Results from the survey showed that 82.77% of retailers in Japan between June and July were “currently experiencing effect”, while 12.89% said that they were “not affected at the moment but possible from now on” and 4.34% said they were experiencing no effect. The percentage of retailers experiencing an impact has not decreased below 83% since April.
Maezawa’s previous deals
Maezawa sold Zozo’s majority stake to Softbank subsidiary Yahoo Japan as part of a deal worth JPY400bn ($3.7bn) in September 2019.
The deal was made to help Yahoo Japan be able to compete better with rivals Ratuken and Amazon.
At the time, Maezawa had said on Twitter: “I will entrust Zozo to a new president and take my own path.”