AMAZON.COM buying shoe seller zappos for $928 million

San Francisco
The Economic Times
Amazon.com will pay about $928 million for booming online shoe retailer Zappos.com, expanding aggressively into the apparel arena with a well-known name after trying unsuccessfully to go it alone.

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.

Analysts applauded the deal. Bernstein Research analyst Jeffrey Lindsay called it an "outstanding acquisition."

But the move also signaled Amazon had fallen short with its online shoe site Endless.com, launched in 2007.

"This is, in some ways, Amazon throwing in the towel on footwear because they've tried to compete with Zappos," said Forrester Research analyst Sucharita Mulpuru.

"If you can't beat them, buy them."

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.

That has allowed the company to post robust online sales in recent years, outpacing brick-and-mortar retailers, even as former online stalwarts such as eBay Inc, have stumbled.