June 25, 2024 at Etsy Inc. headquarters in Brooklyn, New York.
Victor J. Blue | Bloomberg | Getty Images
Etsy Shares soared more than 14% in after-hours trading Wednesday after the company’s announcement. eBay The company plans to acquire used clothing reseller Depop for about $1.2 billion in cash.
The deal comes nearly five years after Etsy acquired Depop for about $1.62 billion, giving the online marketplace an edge for young consumers who flock to the British-founded app to sell used clothing, shoes, accessories and other goods. Etsy says about 90% of Depop users are under the age of 34.
“We’re excited about this transaction, which allows us to focus on the exciting opportunity before us: growing the Etsy Marketplace in a way that matters most to buyers and sellers,” Etsy CEO Kurti Patel Goyal said in a statement.
The transaction is expected to close in the second quarter of this year.
In recent years, Etsy has acquired several niche online marketplaces as part of its “House of Brands” strategy to compete with larger, faster-growing competitors. Amazon. But it has since unwound many of those deals, including Brazilian e-commerce company Elo7 in 2023 and musical instrument market Reverb last year.
Etsy has struggled to grow its business since the pandemic-induced e-commerce boom, while battling stiff competition from Amazon, Shopify and ultra-cheap online marketplaces such as Temu, Shein and TikTok Shop.
Etsy’s core platform saw year-over-year declines in active buyers and gross merchandise volume in 2024, a trend that continued last year. The company is also bearing the brunt of President Donald Trump’s tariff policies and a challenging macroeconomic environment that has led to a decline in consumer discretionary spending.
EBay CEO Jamie Iannone said Depop will help the 30-year-old company grow its presence in the fashion space.
“This acquisition is an opportunity to advance one of our newest and fastest growing focus categories with a marketplace that complements our existing presence and allows us to reach younger audiences across the expanding recommerce landscape,” Iannone said in a statement.
eBay’s stock price rose more than 8% in after-hours trading following the news, which was announced at the same time as the company’s fourth-quarter results.
According to LSEG, eBay reported adjusted earnings of $1.41 per share and revenue of $2.97 billion, beating analysts’ estimates of $1.34 per share and $2.88 billion. Sales increased by 15% compared to the previous year.
Total circulation, or the dollar value of goods sold, increased 10% from a year earlier to $21.2 billion, exceeding Wall Street expectations of $20.8 billion.
For the first quarter, eBay said it expects adjusted earnings per share to be in the range of $1.53 to $1.59 and revenue in the range of $3 billion to $3.05 billion. Analysts had expected earnings of $1.48 per share and revenue of $2.8 billion.
