The Etsy Inc. headquarters in the Brooklyn borough of New York on June 25, 2024.
Victor J. Blue | Bloomberg | Getty Images
Etsy shares skyrocketed more than 14% in extended trading on Wednesday after the company announced eBay would acquire its secondhand clothing reseller Depop for about $1.2 billion in cash.
The deal comes almost five years after Etsy bought Depop for roughly $1.62 billion, giving the online marketplace an edge into younger consumers who flocked to the U.K.-founded app to hawk their used clothing, shoes, accessories and other goods. About 90% of Depop’s users are under the age of 34, Etsy said.
“We are excited that this transaction allows us to focus exclusively on the compelling opportunity we see in front of us: to grow the Etsy marketplace in ways that matter most to our buyers and sellers,” Etsy CEO Kruti Patel Goyal said in a statement.
The transaction is expected to close in the second quarter of this year.
In recent years, Etsy snapped up several niche online marketplaces as part of a “house of brands” strategy to compete with bigger, faster-growing rivals like Amazon. But it’s since unwound many of those deals, including Brazilian e-commerce company Elo7 in 2023 and musical instrument marketplace Reverb last year.
Etsy has struggled to grow its business since the pandemic e-commerce boom, while it contends with stiff competition from Amazon, Shopify and ultracheap online marketplaces like Temu, Shein and TikTok Shop.
On its core platform, Etsy saw active buyers and gross merchandise volume decline year over year in 2024, a trend that continued last year. The company has also borne the brunt of President Donald Trump’s tariff policies and a tough macroeconomic environment that led to a pullback in discretionary spending among consumers.
EBay CEO Jamie Iannone said Depop would allow the 30-year-old company to grow its presence in fashion.
“This acquisition presents an opportunity to advance one of our newest and fastest-growing Focus Categories with a marketplace that complements our existing presence, and enables us to reach a younger demographic across the expanding recommerce landscape,” Iannone said in a statement.
Shares of eBay surged more than 8% in extended trading following the news, which was announced alongside the company’s fourth-quarter earnings results.
EBay reported adjusted earnings per share of $1.41 on revenue of $2.97 billion, surpassing analyst estimates of $1.34 per share and $2.88 billion, according to LSEG. Sales increased 15% from a year ago.
Gross merchandise volume, or the dollar value of items sold, grew 10% year over year to $21.2 billion, above Wall Street expectations for $20.8 billion.
For the first quarter, eBay said it expects to post adjusted earnings per share between $1.53 and $1.59 on revenue in the range of $3 billion and $3.05 billion. Analysts anticipated $1.48 per share and $2.8 billion in sales.
