2023-07-18 07:37:13 ET
Etsy ( NASDAQ: ETSY ) disclosed on Tuesday that it entered into a quota purchase agreement to sell the parent holding company of Elo7 Serviços de Informática S.A. to Brazilian firm Enjoei S.A. Elo7 is the online retailer's Brazil-based marketplace for handmade and unique items.
Etsy ( ETSY ) CEO Josh Silverman said that although the Elo7 team has worked very hard to build a beloved marketplace and vibrant community in Brazil, the company has not seen the performance it anticipated when it made the acquisition decision two years ago. Silverman said the lack of success was due in part to the macroeconomic environment.
"Given the circumstances, we believe this is the best outcome for Etsy, our stockholders and other stakeholders, and Elo7 and its employees, as well as the Elo7 buyer and seller communities. Following the close of the transaction, anticipated in the third quarter, Etsy’s House of Brands will include the three scaled, global marketplaces Etsy, Reverb, and Depop."
Key areas of investment for Elo7 last year, included conversion rate improvements and giving sellers access to faster and more affordable shipping. Elo7 also began testing an online marketing campaign in Brazil aimed at driving brand awareness as it builds a broader marketing strategy.
Etsy ( ETSY ) did not update on the financial impact of the transaction. Further details are expected on the Q2 earnings conference call in early August.
Shares of Etsy ( ETSY ) moved up 0.21% premarket to $93.60 vs. the 52-week trading range of $80.44 to $149.91.
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Etsy discloses sale of Brazilian asset Elo7