Etsy Refocuses on Core Marketplace
Shares of Etsy surged more than 14% in after-hours trading Wednesday after the company revealed it will sell its secondhand fashion platform Depop to eBay for approximately $1.2 billion in cash.
The transaction marks a significant shift nearly five years after Etsy acquired the U.K.-founded resale app for about $1.62 billion. At the time, the move was designed to attract younger shoppers drawn to resale clothing, footwear and accessories. Roughly 90% of Depop’s user base is under the age of 34, according to Etsy.
Etsy Chief Executive Kruti Patel Goyal said the divestiture allows the company to concentrate fully on expanding its primary marketplace. The deal is expected to close in the second quarter, pending customary approvals.
The sale signals a continued retreat from Etsy’s prior “house of brands” strategy, under which it purchased several niche platforms to compete more directly with larger e-commerce players. In recent years, Etsy has divested businesses including Brazilian marketplace Elo7 and musical instrument platform Reverb.
Competitive Pressures Mount
Etsy has faced slowing growth since the surge in online shopping during the pandemic. The company continues to navigate intense competition from Amazon, Shopify and fast-growing low-cost platforms such as Temu, Shein and TikTok Shop.
On its flagship site, Etsy reported declines in both active buyers and gross merchandise volume in 2024, with pressures extending into the following year. Broader macroeconomic uncertainty and shifting consumer spending patterns have also weighed on discretionary purchases.
The company has additionally faced headwinds from tariff policies introduced under President Donald Trump, which have added cost uncertainty for sellers and buyers across cross-border commerce.
eBay Expands Fashion Ambitions
For eBay, the acquisition strengthens its push into fashion and the growing resale economy. Chief Executive Jamie Iannone described Depop as a strategic fit that enhances eBay’s presence among younger consumers and complements its existing marketplace.
The announcement coincided with eBay’s fourth-quarter earnings release. Shares of eBay climbed more than 8% in extended trading following the news.
eBay reported adjusted earnings per share of $1.41 on revenue of $2.97 billion, exceeding analyst expectations of $1.34 per share and $2.88 billion in revenue, according to LSEG. Sales rose 15% compared with a year earlier. Gross merchandise volume reached $21.2 billion, up 10% year over year and above Wall Street projections.
Looking ahead, eBay forecast first-quarter adjusted earnings per share between $1.53 and $1.59 on revenue of $3 billion to $3.05 billion, both ahead of analyst estimates.
