Trend goes out and in of fashion, and so, it seems, do style startups. Lyst — the high-end style market with 160 million customers that was as soon as valued at $700 million — has been acquired for simply $154 million in an all-cash deal. The customer is Zozo, a Japan-based style and e-commerce enterprise.
Zozo owns quite a lot of style manufacturers that embody Put on by Zozo, together with a number of others with names like Zozotown and Zozosuit.
(However you may higher know the title for one more purpose. Its founder Yusaku Maezawa as soon as claimed the title of “most retweeted tweet“, when the platform was nonetheless Twitter, when he promised to offer away 100 million yen in money for retweeting it. Obscure-hacking harking back to Elon Musk, who Maezawa was, coincidentally, additionally paying to shoot up in a SpaceX rocket.)
Zozo mentioned it is going to proceed to function UK-based Lyst as a standalone enterprise as a part of that secure. Present Lyst CEO Emma McFerran will stick with the corporate.
The acquisition — at a massively decreased worth in comparison with Lyst’s final valuation — is coming at a time of robust uncertainty on the planet of e-commerce. Lyst particularly was going through headwinds from three completely different instructions.
First, U.S. tariff hikes are elevating questions round how world commerce will look within the coming months and years, together with the affect on smaller firms outdoors the U.S. promoting items to U.S. shoppers however equally the ripple impact on buying and selling between different international locations and areas. Almost one-third of London-based Lyst’s revenues presently come from gross sales within the U.S.
Second, even earlier than these tariffs grew to become a problem, Lyst was going through huge competitors in on-line style not simply from different specialist gamers but in addition behemoths like Amazon and Temu.
Third, know-how traders at present have over-indexed massively on something and every part to do with synthetic intelligence. That has put a whole lot of stress on firms 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 have gotten the memo. The pair will likely be “Reworking the Way forward for Trend Discovery via AI and Know-how,” they prominently word of their announcement. That phrasing is talked about once more within the launch, however there are not any particular particulars of what, precisely, that can imply.)
The deal offers Zozo a foothold within the U.Okay., but it surely additionally offers it a world enterprise. Lyst mentioned that it has prospects in 190 markets, with 30% of its enterprise coming from the U.S., 24% from the U.Okay., and 34% from Europe.
Lyst has leaned into the lengthy tail of style model aggregation in a market mannequin: it claims to supply merchandise from 27,000 manufacturers, together with each designers and retailers. The checklist consists of Prada, Gucci, Bottega Veneta, Valentino, Miu Miu; Coach, Michael Kors, Hugo Boss, Selfridges, Harvey Nichols and Harrods.
Lyst was one of many winners of the e-commerce increase throughout and simply after the height of the Covid-19. When it raised $85 million in Could 2021 in a spherical led by Constancy, it did so at a valuation of round $700 million. Different big-name traders within the firm embody Accel, Balderton, Molten (previously Draper Esprit) and others. The corporate on the time described the funding as a pre-IPO spherical. Nonetheless, not solely did the IPO window slam shut, however a whole lot of the inflated features e-commerce firms noticed through the pandemic shortly misplaced air as shoppers returned to their pre-pandemic spending habits. (After which traders moved on to the following huge factor, AI.)
And in style e-commerce extra particularly, the market has been robust for these manufacturers individually and collectively.
A spokesperson explains that Lyst’s 160 million customers are “annual distinctive customers”. However that determine consists of energetic customers in addition to these simply window procuring. It’s arduous to understand how profitable the corporate has been in conversions, an necessary a part of the e-commerce mannequin. It has not been alone: Different huge names in high-end style commerce like Farfetch have additionally nosedived within the post-Covid years.
In Lyst’s most up-to-date monetary filings in Firms Home in December 2024, the corporate famous that its whole revenues for the yr that ended 31 March 2024 had been £50.1 million ($64 million). That’s largely flat on its revenues from the yr earlier than, which had been £50 million.
Lyst in that point remained unprofitable, but it surely did handle to chop its loss drastically over that yr to £510,000 from £23.7 million a yr earlier than. (It additionally posted an working revenue earlier than taxes of £443,000.)
“That is an thrilling second for Lyst, and a win-win for our style ecosystem of customers and companions as we transfer ahead as a part of ZOZO Group,” McFerran mentioned in a press release.
Now the query will likely be whether or not getting higher economies of scale with Zozo will give Lyft the elevate it wants to show this round.