TOKYO (Reuters) – SoftBank-backed online fashion retailer Zozo Inc’s (3092.T) shares closed up 21% on Friday in their largest single-session gain, a day after reporting a 34% jump in first-quarter operating profit as Japanese consumers embrace online shopping.
The results are a bright spot in a fashion industry hammered by the coronavirus outbreak as consumers stay home, benefiting from brands shifting unsold inventory to the site.
The profit growth is a tailwind for CEO Kotaro Sawada, who took over from flamboyant founder Yusaku Maezawa after the sale to SoftBank Group (9984.T), which exerts control via its domestic internet business Z Holdings (4689.T).
Maezawa pushed Zozo into the headlines with splashy but unsuccessful ventures like the Zozosuit body measuring suit but alienated key business partners. Tenants like Onward Holdings (8016.T) have returned to the site under the new management.
SoftBank is making a major push into ecommerce with Amazon (AMZN.O) and Rakuten (4755.T) contender PayPay Mall. The site also features Zozo, which hopes to bring in new customers beyond its fashion-loving base.
Zozo sees full year gross merchandise value, a measure of transaction volumes, rising 12% year-on-year to 387 billion yen, with operating profit seen rising 42% to 40 billion yen.
Reporting by Sam Nussey; editing by Uttaresh.V & Shri Navaratnam