What’s Going On Here?Naver, South Korea’s biggest internet company, announced this week that it’s buying US clothing reseller Poshmark in a deal worth $1.2 billion. What Does This Mean?The US online second-hand fashion market's already worth a sleek $80 billion at the moment, and it's predicted to hit a show-stopping $130 billion by 2025. And with that hefty twelve-figure forecast, it’s no surprise that it’s attracting overseas attention. Just look at Naver: South Korea’s biggest internet company is buying US second-hand fashion marketplace Poshmark at nearly $18 a share – a whole 15% more than what they were worth before the deal was announced. The acquisition is Naver’s biggest ever and reveals the company’s commitment to becoming a global player in the online fashion space: its ambitious plan involves enriching Poshmark’s social shopping platform – which boasts an 80 million-strong customer base – with new live-streaming features that are popular in Asia. And at the same time, it’ll give Poshmark access to Naver’s vast ecommerce experience, while letting the platform continue to operate independently. Why Should I Care?For markets: Dangerous liaison.
It seems investors weren’t sold on Naver’s grand plan. In the wake of the news, the company’s shares hit a low they haven’t seen since April 2020 – and not without reason. After all, Poshmark’s stock price has been in near-constant freefall since it went public last year, and the fact it’s likely to post a $70-million loss this year hardly screams “Buy me!”. All in all, then, Naver’s going to have to put its shoulder to the grindstone if it hopes to turn this deal to its advantage.
Zooming out: Dressing down.
With the global economy faltering and ecommerce growth going slack, circumstances seem to be set against Naver. Look at fashion retailer Boohoo: last week the company reported its first ever drop in sales in the first half of the year – and with cash-strapped consumers skimping on fashion sense in favor of financial sense, the company found itself forced to slash profit predictions for the rest of 2022 too. | 
