Fashion goes out and in of fashion, and it seems, so do trend startups. Lyst, a high-end trend market that was as soon as valued at $700 million, has been acquired for simply $154 million in money by Zozo, a Japan-based trend and e-commerce enterprise.
Zozo owns various trend manufacturers that embrace Wear by Zozo, Zozotown and Zozosuit, amongst others. You might need heard of Zozo for one more cause, although: Its founder Yusaku Maezawa as soon as had the “most retweeted tweet,” when he promised to present away 100 million yen in money for retweeting it.
Zozo mentioned it’s going to proceed to function U.Ok.-based Lyst as a standalone enterprise, and its present CEO Emma McFerran is staying with the corporate.
It goes with out saying that Lyst bought for a price ticket massively decrease than its final valuation, however it’s an indication of the occasions: The world of e-commerce is going through spectacular ranges of uncertainty, and Lyst itself was coping with headwinds from three completely different instructions.
First, U.S. tariff hikes are elevating questions round the way forward for international commerce, together with the influence on smaller corporations internationally that promote items to U.S. customers. Nearly a 3rd of London-based Lyst’s revenues presently come from gross sales within the U.S.
Second, even earlier than these tariffs turned a problem, Lyst was going through large competitors in on-line trend not simply from different specialist shops, but in addition behemoths like Amazon and Temu.
Third, expertise traders right now have over-indexed massively on something to do with synthetic intelligence. That has put a whole lot of stress on corporations which can be not in that area to point out related progress trajectories, plus progress tales that one way or the other incorporate AI anyway.
Lyst and Zozo appear to have gotten the memo. The pair can be “Transforming the Future of Fashion Discovery by AI and Technology,” the businesses prominently famous of their announcement. That phrase is talked about once more within the launch, however there aren’t any particular particulars of what that can imply.
In addition to a foothold within the U.Ok., the deal additionally provides Zozo a world enterprise. Lyst mentioned it has clients in 190 markets, with 30% of its enterprise coming from the U.S., 24% from the U.Ok., and 34% from Europe.
Lyst has leaned into the lengthy tail of trend model aggregation in a market mannequin: It claims to supply merchandise from 27,000 manufacturers, together with each designers and retailers. The checklist contains Prada, Gucci, Bottega Veneta, Valentino, Miu Miu, Coach, Michael Kors, Hugo Boss, Selfridges, Harvey Nichols and Harrods.
The firm was one of many winners of the e-commerce growth throughout and simply after the height of the COVID-19 pandemic. When it raised $85 million in May 2021, Lyst gained a valuation of round $700 million. Fidelity led that spherical, and different big-name traders within the firm embrace Accel, Balderton, and Molten (previously Draper Esprit). The firm on the time even described the funding as a pre-Stock Launch spherical.
However, not solely did the Stock Launch window slam shut a number of months later, however a whole lot of the positive factors e-commerce corporations noticed throughout that interval rapidly deflated as customers returned to their pre-pandemic spending habits. And then traders moved on to the following large factor, AI.
And the style e-commerce market, extra particularly, has remained troublesome.
A spokesperson defined that Lyst’s 160 million customers are “annual distinctive customers,” however that determine contains energetic consumers in addition to these simply window procuring. It’s laborious to know the way profitable the corporate’s conversion technique (essential for e-commerce corporations) has been. And it has not been alone — different large names in high-end trend commerce like Farfetch have additionally nosedived for the reason that pandemic.
Lyst recorded income of £50.1 million ($64 million) within the 12 months ended 31 March, 2024, largely the identical as its income from the 12 months earlier than (£50 million), per its most up-to-date Companies House filings in December 2024.
Lyst remained unprofitable in that point, however it did handle to slim its loss drastically over that 12 months to £510,000 from £23.7 million a 12 months earlier than. It additionally posted an working revenue earlier than taxes of £443,000.
“This is an thrilling second for Lyst, and a win-win for our trend ecosystem of consumers and companions as we transfer ahead as a part of ZOZO Group,” McFerran mentioned in an announcement.
Now the query can be whether or not getting higher economies of scale with Zozo will give Lyst the raise it wants to show this round.
