Rakuten acquires for 25 million

Japanese e-tailer buys 100 per cent of online store's stock

Rakuten, a Japanese online retail concern, has announced the purchase of 100 per cent of stock in for approximately 25 million, making it the third European e-commerce site acquired by the company.

Rakuten acquired French business PriceMinister in 2010 and German online retailer Tradoria in July of this year. As a whole, Rakuten operates online business in ten countries globally.

"The UK market is one of Europe's largest and most mature e-commerce markets. is not only a pioneer in the market, but also one of the UK's most successful e-commerce businesses," said Rakuten CEO Hiroshi Mikitani.

"We aim to leverage our e-commerce strength and experience to further expand and develop's business model and channel its loyal user base, merchants, and deep product offerings into Rakuten's global e-commerce network."

The UK has the largest e-commerce market in Europe, with a value expected to exceed $58.0 billion and 55 million users by 2014.

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Latest comments (13)

Matthew Hill Head of Recruitment, Specialmove7 years ago
I don't have any knowledge of's financials but this strikes me as a low valuation. Certainly a wide gap between this and Hut Group's valuation at 300M in June according to the FT ? Hope this proves a positive development for Play as I've always respected them

FT Link
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Could have been a good M&A on the cheap, for a group looking to enter the mail order/online biz
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Glen Elliott Partner/Head of Sales, European Game League7 years ago
Agreed Matthew, it does look like they bought it on the cheap, It was only in April that hired Lazard to explore a capital increase as it wanted an "aggressive" European expansion (bloomberg)

Considering is the UK's 6th biggest e-retailer, I think there is more to this deal then they have published, maybe some equity in Rakutan for the shareholders?
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Terence Gage Freelance writer 7 years ago
I definitely agree Matthew that this seems like a very low valuation of what must be one of the country's top online entertainment retailers - I wouldn't be surprised if in their specific field they were second only to Amazon.

Bit sad to see yet another good British business bought out by a larger overseas company, but such is the nature of capitalism.
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In fact the article is incorrect, the acquisition price was 25m not $25m (as detailed in the Rakuten press release). However this does little to impact the impression that the transaction undervalues the business. According to the Guardian, has annual sales of c. 500m so either it is heavily loss-making and this is a firesale or the press release excludes important transaction details such as the assumption of significant debt or sizeable potential earn-out terms.
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James Johnstone7 years ago
As long as this doesn't affect prices of items on the site, this news doesn't bother me too much, But i was never aware how strong our british E-commerce business model was.
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Matthew Hill Head of Recruitment, Specialmove7 years ago
Nick - good points, in absence of further details it's hard to draw any definitive conclusions. Intrigued to see how Rakuten will impact on the business. At the very least I'd anticipate some "rationalisation"/centralisation of back end systems across their back end systems and processes for their various online brands.
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do we even know how successful or what rakuten does well?
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Glen Elliott Partner/Head of Sales, European Game League7 years ago
Dr, their stock value has increase 50% over the past year, so investors feel they are doing something right, I'm not 100% on what they do in Japan, but they have been buying similar sites in Europe over the past 12 months. Company description:

"Rakuten, Inc. operates and manages business to consumer electronic commerce
site, Rakuten Ichiba, and consumer to consumer auction site, Rakuten Freemarket.
The Company generates sales from system service fees and advertising fees from
electronic commerce companies listed on its web site."

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@ Glen - looks like Rakuten are actually a behemoth in japan and as you say doing extremely well

"Rakuten's 2005 revenues exceeded US$1.1 billion with operating profits of approximately $320M. The company is publicly-traded (JASDAQ: 4755) with a market capitalization ranging from $5B+ and more than 3,700 employees. Rakuten is among the top 10 largest Internet companies in the world "
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Ben Simpson CEO & Co-founder, Box Of Frogs Media7 years ago
Nick, Matthew, right on the nail I think. The valuation points to a failing business model, an inability to maintain market traction in challenging times and perhaps little to no market growth. Play and the Jersey advantage no longer drives the company, their pricing model is no longer the most economic on the web and bigger players consistently price below Play. Clearly we are not party to all the information so we can muse about why the valuation is so low but having no facts its difficult to say.
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Raf Keustermans CEO, co-founder Plumbee 7 years ago
Based on this article in Guardian, it looks like it's all about change in legislation which will stop them from using a current VAT loophole - that's most likely the reason behind the low valuation:
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Matthew Hill Head of Recruitment, Specialmove7 years ago
Hi Raf = thanks for the link.

Personally I think closing of the VAT loophole is a factor but not necessarily the most important. Assuming the loophole is closed Play will remain competitive against bricks & mortar retailers and also have more buying power & customer intelligence than many online retailers.

My gut instinct is compared to other online retailers Play may be overdependent on physical sales of DVD, Games & Music which are declining or moving to alternative models - F2P etc.
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