Moon-Bound Billionaire Maezawa Bets on Japan Apparel Brands

Yusaku Maezawa, the Japanese billionaire who sold his online apparel company to Masayoshi Son and is preparing to ride around the moon on Elon Musk’s spacecraft, jumped back into the country’s business scene Thursday with a set of unlikely bets on brick-and-mortar clothing retailers.

In a set of filings, Maezawa disclosed stakes making him the third-largest shareholder in fashion retailers United Arrows Ltd. and Adastria Co. The holdings are worth a combined 7.6 billion yen ($71 million).

While the stock purchases were for investment purposes, Maezawa may also “give advice or make proposals to management to improve enterprise value if needed, assuming a friendly relationship can be created with management,” the filings said.

Both companies sell their goods on Zozo Inc., the fashion portal that Maezawa sold to SoftBank Group Corp. unit Z Holdings Inc. last year. United Arrows and Adastria could both use the help of a deep-pocketed investor. Like many Japanese clothing retailers, their shares have been devastated by the coronavirus pandemic which has kept shoppers at home.

United Arrows rose as much as 14% in Tokyo on Friday, the most since March, while Adastria added up to 7.3%.

Spokeswomen for both companies told Bloomberg News that they had been informed of Maezawa’s stake in advance of the disclosure today, which is required by Japanese law once a shareholder’s stake exceeds 5%. Both said they had yet to receive any specific proposals from the former Zozo chief.A spokesperson for Maezawa declined to comment, though Maezawa himself did tweet out a Japanese media article on the purchases.

Public Spotlight

Since cashing out of Zozo, Maezawa has hardly been quiet: tabloid speculation on his love life, a series of cash giveaways on his well-followed Twitter account, and a short-lived plan to star in a TV documentary to find him a girlfriend have all kept one of Japan’s richest men — worth $3.5 billion according to the Bloomberg Billionaires Index — in the public spotlight.

But apart from a plan to set up a 10 billion yen startup fund and reports over his taxes, the man who built a fortune before 40 has had little time in the business pages.

United Arrows, which has around 360 stores in Japan, is projecting a operating loss of 5 billion to 7 billion yen this fiscal year, with shares down 57% since the start of 2020. Shares in Adastria, which operates a multitude of casual and high-end fashion brands, have declined 35%.

“Zozo’s ex-CEO could advise on the digitization of supply chains,” said Bloomberg Intelligence analyst Catherine Lim. “Successful transformation of traditional supply chains that facilitate offline-online sales could help raise both companies’ competitive edge and longer-term profitability.”

While Maezawa stepped down from managing Zozo after the Z Holdings takeover, he retains a 17.5% stake that is the source of much of his wealth. Shares in Zozo are up 35% this year as more Japanese consumers embraced web shopping for clothes during the coronavirus pandemic.

©2020 Bloomberg L.P.

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