Amazon.com buying shoe seller Zappos for $928 million
Amazon said on Wednesday it struck a deal to buy Zappos, for 927.9 million — mostly in stock — growing its footprint in shoes and apparel.
The world’s largest online retailer should benefit from the fiercely loyal customer base at Zappos, which had about $1 billion of gross merchandise sales last year.
Zappos is known for its attentive customer service, free shipping and a free returns policy which inspires shoppers to gamble on shoes.
The company said Amazon will allow it to continue running its business as it always has.
Amazon, which began as an online bookseller, has greatly expanded its range of offerings while also allowing third-party sellers to showcase their own items on its site.
In 2008, Zappos earned more than $40 million before interest, tax, and amortization on net revenue of $625 million, a Zappos shareholder who had seen the company’s financials told Thomson Reuters private-equity news site PEHub.
The source, who spoke on condition of anonymity, said the company had considered going public through an IPO, but that main investor Sequoia Capital had pushed for a sale instead.
Zappos has put customers at ease buying shoes online because it guarantees free shipping on deliveries as well as returns.
Based on Amazon’s closing price of $88.79, the deal is valued at about $927.9 million.
Morgan Stanley, and Fenwick & West advised Zappos on the deal.
Lazard Ltd advised Amazon.
