Yahoo Japan nears deal for majority stake in Zozo

Yusaku Maezawa, the flamboyant Japanese entrepreneur who’s set to become the first paying passenger aboard Elon Musk’s SpaceX ride around the …
  • Yusaku Maezawa, founder of Zozo Inc. (right), and Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., attend a news conference in Tokyo on Sept. 12, 2019. Photo: Bloomberg Photo By Akio Kon. / © 2019 Bloomberg Finance LP
    Yusaku Maezawa, founder of Zozo Inc. (right), and Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., attend a news conference in Tokyo on Sept. 12, 2019.
    Yusaku Maezawa, founder of Zozo Inc. (right), and Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., attend a news conference in Tokyo on Sept. 12, 2019.

    Photo: Bloomberg Photo By Akio Kon.

Photo: Bloomberg Photo By Akio Kon.
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Yusaku Maezawa, founder of Zozo Inc. (right), and Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., attend a news conference in Tokyo on Sept. 12, 2019.
Yusaku Maezawa, founder of Zozo Inc. (right), and Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., attend a news conference in Tokyo on Sept. 12, 2019.

Photo: Bloomberg Photo By Akio Kon.

Yahoo Japan nears deal for majority stake in Zozo
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Yusaku Maezawa, the flamboyant Japanese entrepreneur who’s set to become the first paying passenger aboard Elon Musk’s SpaceX ride around the moon, is cashing out of the business that made him a billionaire.

Maezawa steps down as chief executive officer of Zozo Inc. Thursday and plans to sell a chunk of his shares as part of a $3.7 billion takeover by Yahoo Japan Corp. Wearing a white T-shirt declaring “Let’s Start Today” atop a peace symbol, he said he was leaving his company behind to create a new business, without specifics. He’ll need to train for Musk’s mission and may even embark on another space project he said again without elaborating.

At times fighting back tears, Maezawa thanked his supporters and reflected on his entrepreneurial career. “I don’t have an MBA or experience working at a company, but next thing I know I became a president, we got many customers and went public,” he told reporters at a press briefing. “The past 21 years were like a dream.”

SoftBank Group Corp.’s Masayoshi Son made a surprise appearance, wearing a matching T-shirt in black. Son said Maezawa had approached him seeking advice ahead of the Yahoo Japan deal. He praised the younger man’s boldness, but joked that he passed on an invitation to fly to the moon. “That’s too scary,” Son said.

Announced on Thursday morning, the deal immediately sent stock prices for both companies up. Yahoo Japan is paying a 21% premium to take control of a valuable online fashion store, which strengthens its challenge against Amazon.com Inc. and Rakuten Inc. in one of Asia’s largest e-commerce arenas. Zozo director Kotaro Sawada will take the helm, while Maezawa has tweeted “I myself will be setting off on a new path” after the sale’s announcement.

“It’s a plus for Yahoo Japan and would help expand their e-commerce operations,” said Mitsushige Akino, an executive officer with Ichiyoshi Asset Management Co. in Tokyo. “Zozo gets the financial backup it needs for its new venture and overseas expansion.”

Maezawa is departing the company he founded, which was instrumental to amassing his fortune and building up his name. But he’s unlikely to stop defying the norms of Japanese society — the other winning aspect to his unconventional approach to business.

Before Zozo, he skipped college and moved to California to play in a rock band. Returning to Japan, he started his own e-commerce company and built the shopping website Zozotown into a popular destination for younger consumers, starting from the humble beginnings of a mail-order music album business. Maezawa now has a net worth of $1.5 billion, according to the Bloomberg Billionaires Index, but he has tweeted claiming to “have no money. I spend it so quickly.”

Maezawa had been directing Zozo investment toward developing a custom clothing brand, seeking to attract customers through innovative ways of taking individual measurements. His company shipped about 3 million so-called Zozosuits, polka-dot spandex outfits for taking body measurements with the help of a smartphone. But the business was shut down in March. He also said the company plans to launch a foot-measuring device called Zozomat in the fall.

Yahoo Japan, whose biggest shareholder is the local telecommunications arm of Masayoshi Son’s SoftBank Group Corp., saw its shares rise 2.4% in Tokyo, while Zozo surged 13.4%. Among the local online retail competition, Rakuten and Mercari Inc. slid. Investors in those companies feared the Yahoo Japan deal would intensify competition, said Masayuki Otani, chief market strategist at Securities Japan Inc. in Tokyo.

The cost of the acquisition could go as high as 400.7 billion yen, according to the two companies’ announcement, giving Yahoo Japan a 50.1% slice of Zozo.

“Together with Zozo, getting to No. 1 in domestic e-commerce comes realistically within striking distance,” Yahoo Japan’s CEO Kentaro Kawabe said at the Tokyo briefing, adding that the company may capture top share within next five to six years.

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Bloomberg’s Shingo Kawamoto contributed.

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Yahoo Japan plans tender offer for retailer Zozo at $3.7B

Zozo’s stock price jumped 13% in Tokyo trading Thursday, while Yahoo Japan Corp. rose 2.3% and SoftBank Group Corp. edged up 0.2%. ___.

FILE – In this Nov. 20, 2018, file photo, Zozo Chief Executive Yusaku Maezawa speaks during a press conference on the PGA Tour in Tokyo. Yahoo Japan Corp. said Thursday, Sept. 12, 2019 it will put up a tender offer, estimated at 400 billion yen ($3.7 billion), for Zozo Inc., a Japanese online retailer started by a celebrity tycoon. Maezawa is known for lavish spending on artworks by Jean-Michel Basquiat, a Stradivarius violin and a future trip to the moon. (AP Photo/Koji Sasahara, File)

TOKYO (AP) — Yahoo Japan Corp. announced on Thursday a tender offer worth an estimated 400 billion yen ($3.7 billion) for Zozo Inc., a Japanese online retailer started by a celebrity tycoon.

Zozo Chief Executive Yusaku Maezawa told reporters at a Tokyo hotel that he was stepping down to devote more time to training for a trip to the moon in 2023. He has plans to ride on Elon Musk’s Space X rocket.

Maezawa owns nearly 37% of the company and will sell nearly 93 million of his more than 112 million shares, according to the plan. Yahoo Japan will own up to 50.1% under the tender offer, set for early October, it said.

Maezawa, known for lavish spending on artworks by Jean-Michel Basquiat and a Stradivarius violin, said he also intends to announce later plans for another business.

“I was so moved by that feeling of building something from scratch,” he said of starting his company 21 years ago when he still lived with his parents.

“I want to thank all the employees for supporting and following someone who is so lacking like me. We laughed and we cried together. We had fun,” he said, choked with emotion.

Maezawa, 43, started out running an import CD business and played in a rock band before he founding his online fashion business with a shopping site called Zozotown when online retailing was still new in Japan.

Recently he drew attention for his Zozosuit, a so-called wearable technology that takes body measures with a software application so that clothes are made to fit.

He never graduated college and is known for a free-wheeling managerial style and corporate culture that are rare in Japan’s staid business world.

Zozo’s tagline is: “Be unique. Be equal.” It said in a statement that becoming a subsidiary of Yahoo Japan will bring stability and a solid partner.

Succeeding Maezawa at Zozo’s helm is Kotaro Sawada, who joined the company about 10 years ago after working at Japanese telecommunications giant NTT Data Corp.

Sawada told reporters that after 21 years it was time for Zozo to grow up. But he promised Zozo will remain creative, and not become boring.

Kawabe said Yahoo, whose revenue comes mostly from advertising, will be able to expand its e-commerce business by adding Zozo. Yahoo aims to be No. 1 in online retail in Japan, he said.

Also appearing at the event was Masayoshi Son, chief executive and founder of SoftBank and a top shareholder of Yahoo Japan. Son acknowledged he had urged Maezawa to stay on as Zozo’s chief.

Son and Maezawa appeared on stage wearing matching T-shirts designed by Maezawa that said “Let’s Start Today” with a peace sign. Zozo originally was named Start Today.

“I guess he wants to live the life of a rocker so I understand,” Son said with a laugh. “I envy him.”

Hiroko Sato, an analyst for Jeffries, said the deal will likely benefit both sides. Yahoo may gain more online shoppers by acquiring Zozo, with its younger customer base.

But Yahoo faces formidable competition from Rakuten in Japan, she said. Amazon is another powerful rival.

“Our initial impression is positive for both companies,” she said.

Zozo’s stock price jumped 13% in Tokyo trading Thursday, while Yahoo Japan Corp. rose 2.3% and SoftBank Group Corp. edged up 0.2%.

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