Amazon said Wednesday that it is acquiring Zappos, an online shoe retailer, for 10 million shares of Amazon stock, which was the largest acquisition in its history.
The stock used for acquisition was worth about 887.9 million U.S. dollars at Amazon's current level. Amazon also said it would give Zappos employees an additional 40 million dollars in cash and stock. The deal is expected to close in the fall.
Zappos, a private U.S. company based in Henderson, Nevada, has won fans with perks like free shipping and personalized service in its 10-year history. It is backed by venture capital firms including Sequoia and becomes the largest player in that market.
Jeffrey P. Bezos, Amazon s chief executive, said that Zappos has a customer obsession, which is so easy for me to admire.
Amazon also sells shoes on its main site and allows outside retailers to sell them there as well. In face of competition from Zappos Amazon introduced a separate site, Endless.com, to sell shoes and handbags in 2007. Though it didn't achieve much success Amazon will continue to operate Endless.com after the deal, according to the company.
People will go to Amazon to purchase a lot of their core media products and consumer electronics. But it is not thought of in the same light when shopping for apparel, accessories and footwear. said Sucharita Mulpuru, an analyst at Forrester.
The companies said that the management team of Zappos would remain intact and that Zappos would continue to operate as an independent division of Amazon from its offices outside Las Vegas.
We plan to continue to run Zappos the way we have always run Zappos continuing to do what we believe is best for our brand, our culture and our business, said Tony Hsieh, Zappos' chief executive.
Online shoe sales hit 4.3 billion dollars last year, up from 3.3 billion dollars in 2007, according to Forrester Research.
