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Japan's fashion retailer Zozo pulls out of markets abroad
03 May '19
2 min read
Pic: Zozo
Japanese online fashion retailer Zozo recently decided to withdraw from international markets a year after unveiling a plan to sell its customised apparel in over 70 markets. While announcing its annual earnings for the year ended March 2019, the company said it will book a nearly $17.8-million loss as an impairment charge for its US and German subsidiaries.
Founder and chief executive officer Yusaku Maezawa, who has claimed a year ago that the company intended to become ‘a top 10 apparel company’ with a valuation of 5 trillion yen, admitted that the company bit off more than it could chew.
Zozo's free polka-dot bodysuits provided to customers allow body measurements to be uploaded to the company, after which consumers can order the brand's custom-fit clothes online without the need for fittings.
The group announced that 1.6 billion yen in extraordinary losses from its overseas business and problems with its private label division had helped push net profit down by 20.7 per cent to 15.9 billion yen—its first-ever drop in annual profit. This came despite a 20.3 per cent rise in revenue to 118.4 billion yen, according to global news wires.
Meanwhile, Zozo is planning to launch an online retail operation in China in November to sell other Japanese brands. The company had entered the market in 2011 but eventually withdrew.
In Japan too, Zozo will scale down its private label business, Maezawa said. The company will instead collaborate with other brands to create up to 50 sizes. Beams and Levi's are among the brands Zozo is working with.
Analysts are optimistic about growth at Zozotown's online marketplace, which accounts for 97% of the company's transaction value.
The company is also planning to be more aggressive in pushing its Zozo credit card by offering more loyalty points when items are purchased at Zozotown. (DS)
Founder and chief executive officer Yusaku Maezawa, who has claimed a year ago that the company intended to become ‘a top 10 apparel company’ with a valuation of 5 trillion yen, admitted that the company bit off more than it could chew.
Zozo's free polka-dot bodysuits provided to customers allow body measurements to be uploaded to the company, after which consumers can order the brand's custom-fit clothes online without the need for fittings.
The group announced that 1.6 billion yen in extraordinary losses from its overseas business and problems with its private label division had helped push net profit down by 20.7 per cent to 15.9 billion yen—its first-ever drop in annual profit. This came despite a 20.3 per cent rise in revenue to 118.4 billion yen, according to global news wires.
Meanwhile, Zozo is planning to launch an online retail operation in China in November to sell other Japanese brands. The company had entered the market in 2011 but eventually withdrew.
In Japan too, Zozo will scale down its private label business, Maezawa said. The company will instead collaborate with other brands to create up to 50 sizes. Beams and Levi's are among the brands Zozo is working with.
Analysts are optimistic about growth at Zozotown's online marketplace, which accounts for 97% of the company's transaction value.
The company is also planning to be more aggressive in pushing its Zozo credit card by offering more loyalty points when items are purchased at Zozotown. (DS)
Fibre2Fashion News Desk – India
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