It would have been difficult to imagine one of the world’s largest online marketplaces for preloved fashion—where a purchase can still feel personal, not commercial—in the hands of a gaming retailer.
Although weirder things have happened in fashion, the status quo will be maintained; eBay Inc. rejected GameStop Corp.’s unsolicited offer to buy the e-commerce firm for nearly $56 billion.
The company listed several factors it considered, including “the uncertainty” around the deal’s financing, as well as the impact of the proposal on eBay’s future, before ultimately turning down the offer.
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“We have concluded that your proposal is neither credible nor attractive,” said Paul S. Pressler, who chairs eBay’s board of directors, in a response letter to GameStop CEO Ryan Cohen.
This marks the end of a short-lived takeover bid for a global e-commerce leader. GameStop offered to buy eBay for $55.5 billion, half of which would be paid in cash while the rest in common stock, over a week ago.
eBay is no stranger to acquisitions. In February, it announced that it was buying the Gen Z fashion resale platform Depop from Etsy for $1.2 billion in cash. The deal is expected to close this second quarter.
Depop, with over 56 million trend-driven and eco-conscious users, has synergies with eBay, according to Dr. Jiyoung Kim, professor and associate dean at Center for Consumer Insights and Innovations in the University of North Texas.
“Both eBay and Depop carry a reputation of ‘being run by people’ with minimal control of the retailer,” Kim said in an e-mail interview with the Sourcing Journal on Tuesday.
“While this can lead to problems such as seller scam or unreliable return policy, it is favored by many because the platform is based on direct seller-customer interaction that allows a better ‘product scavenger hunt’ experience for the buyers and a higher selling price for the sellers,” she added.
If eBay and Depop are run by the people, with the companies providing guidance and quality control, GameStop’s model, on the other hand, puts the retailer in control, managing the entire process from trade-ins and pricing to shipping, she said.
Although GameStop also deals in the preloved market by selling secondhand consoles and games, the volumes managed—not to mention the variables in every used apparel from sizing to quality—are not comparable. Depop, Kim said, listed over 68 million items for sale with up to 600,000 items added daily, while GameStop’s secondhand listing currently lists less than 20,000 items.
“While I am not sure what GameStop had planned to do after eBay/Depop, the learning curve could have been pretty steep,” she said.
