Etsy sells fashion app Depop to eBay, as the pair’s postpandemic paths split further
The $1.2 billion clothes reseller is the last shoe to drop in Etsy’s failed “House of Brands” experiment.
Like many of us who spent the pandemic frittering away our extra savings on things we simply didn’t need, Etsy seems to have a case of buyer’s remorse, offloading the final remnant from its “House of Brands” experiment earlier this week.
On Wednesday, the company announced that it would be selling Depop, the secondhand fashion app beloved by Gen Z, to eBay for $1.2 billion. That’s $425 million less than what it paid five years ago — and a sign of just how sharply the two companies that rode the e-commerce pandemic wave have since diverged.
As its crafty marketplace became a lockdown darling, Etsy took the chance to double down on its brand-building strategy, snapping up Depop and Brazilian marketplace Elo7 to build a portfolio spanning handmade goods, musical instruments, and resale fashion. Investors, naturally, were happy to ride the high with the company, cheering the stock to an all-time record in late 2021.
Downcycling?
But when consumers returned to stores and inflation squeezed discretionary budgets, managing multiple brands alongside its core artisan marketplace has proved too costly for the company. Etsy dumped Elo7 just two years after buying it, then sold off Reverb (a music equipment marketplace it bought in 2019) last year, making it the last name out the door before Depop.
Meanwhile, eBay — the less buzzy elder sibling of e-commerce — has steadily thrived by leaning further into what it already did well: recommerce, with demand from bargain hunters and collectors proving stickier than many expected. Its shares now trade more than 130% above where they started in 2020, while Etsy has erased nearly all its pandemic gains.
So, what does the Depop deal mean for both companies?
For Etsy, CEO Kruti Patel Goyal said the sale allows the company to “focus exclusively” on its core marketplace, where gross merchandise sales have slumped for years. For eBay, the platform could bring a younger audience — about 90% of Depop’s active buyers are under 34 — to the aging behemoth of the online shopping arena.
