Japan's Zozo cuts outlook, blames failed Zozosuit
31/01/2019 06:59
TOKYO, Jan 31 (Reuters) - Japanese fashion e-commerce
website Zozo Inc 3092.T cut its business outlook for the full
year and slashed its dividend, blaming its failed body-measuring
Zozosuit service for weaker-than-expected sales.
Zozo, with a nearly 50 percent share of Japan's e-commerce
market for mid to high-end fashion, had tried to branch out by
launching its own private brand and a made-to-measure service.
But last quarter it scrapped the Zozosuit, a polka dot
bodysuit it distributed for free and allowed users to upload
body measurements, amid complaints over distribution delays.
"By distributing the 'Zozosuit' for free so that people
could take measurements, we were hoping to create demand for the
Zozotown business, including the private brand. But the impact
did not have the scale that we had hoped for," the company said
in a statement.
It said it expects full-year operating profit of 26.5
billion yen, down around 19 percent from a year earlier. It
previously forecast profit to rise to 40 billion yen.
The novelty of the bodysuit, as well as billionaire CEO
Yusaku Maezawa's announcement as the first private passenger on
Elon Musk's SpaceX moon flight, helped the company attract
attention from both consumers and international investors.
Appearing regularly in gossip magazines with a celebrity
girlfriend as well as his collection of art and flashy cars,
Maezawa also gained notoriety last year by signing up to be the
first private passenger on Elon Musk's SpaceX moon flight.
But investors have recently turned wary about the company's
outlook after apparel company Onward Holdings Co 8016.T pulled
its brands off Zozo, with media reports citing friction between
the website and brands over pressure to offer discounts.
The company's shares have halved in the past six months.
Zozo said it now expects to pay a year-end dividend of 10
yen per share instead of an original forecast of 22 yen.
(Reporting by Ritsuko Ando; Editing by Himani Sarkar and
Christopher Cushing)
((Ritsuko.Ando@reuters.com; +81 3 6441 1743; Reuters Messaging:
ritsuko.ando.thomsonreuters.com@reuters.net))