Zozo Acquires Lyst for $154 Million

Japan’s Zozo is acquiring Lyst — the UK fashion platform best known for its shopping search engine and quarterly ranking of sought-out brands and products — for $154 million.

Following the deal, Lyst will become a wholly owned subsidiary of Zozo while continuing to operate as a stand-alone business based in the UK, with Emma McFerran staying on as chief executive.

Zozo operates Zozotown, one of Japan’s biggest fashion marketplaces with gross merchandise value of 141,885 million yen ($976 million) in its most recent fiscal year. Its luxury imprint Zozovilla has attracted global names such as Versace, Marc Jacobs and Maison Margiela.

Zozo is known for its technology-driven vision for enhancing the online shopping experience, driving buzz with branded tools like Zozomat, Zozosuit, and Zozofit that help users take measurements at home to predict how garments will fit.

The company was acquired by Softbank’s Yahoo Japan arm in 2019.

Lyst was founded in 2010, and surfed surging interest in digital fashion concepts to raise an estimated $150 million from external investors (including an $85 million funding round in 2021 at a $700 million valuation, announced as a ‘pre-IPO’ injection).

Since then the company has faced challenges including a rocky market for online fashion, high costs for driving traffic from Google and Meta, and luxury brands reducing their exposure to the multi-brand boutiques that power inventory on Lyst’s platform.

Founder Chris Morton stepped down as CEO in 2022, transitioning to an executive chairman role.

In recent years the company has worked on deploying artificial intelligence to improve fashion search and discovery, expanding its editorial unit to create more engaging storytelling for its platform, and monetising its extensive trove of data, including by consulting for brand and retail partners.

Lyst reached profitability last year, the company said.

Zozo will invest in accelerating Lyst’s efforts in AI-driven fashion discovery, as well as allowing it to onboard its sizing and fit solutions.

Zozo’s acquisition of Lyst will form the “cornerstone” of the Japanese group’s international expansion strategy, the companies said. “Lyst’s strong footprint across the US, UK and Europe is complementary to Zozo’s leading market position in Japan, providing pathways for both companies to expand into new markets.”

“Zozo and Lyst share a vision to transform the online fashion shopping experience by bringing joy back to fashion discovery,” the companies said.