What's going on?

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.