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UPDATE - Cars.com sold $872m, how much is Fashion.com worth? - Auction on 24th October 2019

Updated: Oct 8, 2019




Fashion.com will be sold to a new owner through an auction platform on October 24th, 2019, after a week long event of the Paris Fashion Week 2019 in Paris, France.


" In 1994, the domain’s three current owners were working together on a common fashion project and searched for a domain name that might meet their business needs. They discovered that fashion.com was unclaimed and decided to buy it. After plans for their project changed, the domain sat unused. 


Dozens of groups have since reached out to try and purchase fashion.com over the past 25 years.

During this time, the fashion industry has exploded worldwide, reaching an estimated $2 trillion in annual value, with online sales leading the way and set to increase to $700 billion by 2022. " - Fashion.com

“Fashion.com is a rare one: iconic, highly memorable and easily searched.

It should generate strong sales numbers while saving its buyer

millions in sales and marketing costs.”  — Karine Kugler, CEO & Internet Marketing Expert


"If footwear and jewellery were included, the global annual retail sales in fashion would be around $2 trillion per year . By 2021, the global apparel (not including footwear or jewellery) retail market is forecast to reach $1.4 trillion, an increase of around $106 billion or 8.1% since 2016." - commonobjective.co


"Value of the global fashion industry: 3,000 billion dollars (3 trillion dollars), 2 percent of the world’s Gross Domestic Product (GDP)" - FashionUnited


Retail value of luxury goods market: 339.4 billion dollars

Value of of the menswear industry: 402 billion dollars

Value of the womenswear industry: 621 billion dollars

Bridal Wear market: 57 billion dollars

Childrens wear market: 186 billion dollars

Sports footwear market: 90.4 billion dollars


GLOBAL FASHION INDUSTRY

Fashion industry market share: 4 %

Fashion industry market value: $406 billion


Largest Global Fashion Companies

There are three of the largest global fashion companies as part of 3,000 billion dollars global fashion industry:


1. Louis Vuitton (Moët) : market value - $53.5 billion - 2018 (10% up)

2. Athleisure (Nike) : market value - $36.4 billion - 2018 (6% up)

3. Inditex (Zara, Pull&Bear and Stradivarius) : market value - $28.66 billion - 2018 (3.4% up)


So, how much is domain Fashion.com worth if offered by these companies?

As we know that a domain will always be worth what companies are willing to pay for it.


Historical Background Of Cars.com Domain Sale $872,320,000

Cars.com has been confirmed to have been the largest domain sale in history, with a staggering $872,320,000 dollar valuation, as filed with the Securities and Exchange Commission on May 11, 2017

https://www.sec.gov/Archives/edgar/data/1683606/000119312517167603/d553683ds1.htm


The Cars.com business was sold for 2.5 Billion dollars and the SEC filing by the company state that the domain name as an intangible asset was worth 34.9% to the company. They indeed evaluated it and sold it at $872,320,000.


We can look at the past annual sales/revenue of Cars.com.


Cars.com Annual Sales/Revenue

2014 : $495.95M - Net income $22.6M

2015 : $596.51M - Net income $157.84M

2016 : $633.11M - Net income $176.37M

2017 : $626.26M - Net income $224.44M (In May 2017, sold $2.5B, Domain $872.3M, 34.9% of total business)

2018 : $662.13M - Net income $38.81M


Domain worth / market value x 100 = 34.8928%

872,320,000/2,500,000,000 x 100 = 34.8928%

D / 2,500,000,000 x 100 = 34.8928 %


D = $2,500,000,000 /100 x 34.8928

D = $872,320,000


According to Auto News, "Cars.com's revenue grew 6 percent to $497.8 million for the first three quarters of 2018, while operating income fell 37 percent to $60.1 million. Net income dropped 59 percent to $29.5 million for the nine-month period." due to $872m acquisition of Cars.com, Non Operating Income/Expense. - AutoNews


Assume Domain Value = 2% of Total Business / Market Value

1. Louis Vuitton (Moët) : market value - $53.5 billion - 2018 (10% up)

Domain worth / market value x 100 = 2%

D = $53,500,000,000 / 100 x 2

Domain = $1.07 Billion (133750 Bitcoin)

2. Athleisure (Nike) : market value - $36.4 billion - 2018 (6% up)

Domain worth / market value x 100 = 2%

D = $36,400,000,000 / 100 x 2

Domain = $728 million (91000 Bitcoin)


3. Inditex (Zara, Pull&Bear and Stradivarius) : market value - $28.66 billion - 2018 (3.4% up)

Domain worth / market value x 100 = 2%

D = $28,660,000,000 / 100 x 2

Domain = $573.2 million (71650 Bitcoin)


Based on 7/10/19 ie. 1 btc = $8000


List of India’s Fashion Business Billionaires who may Be Interested in Fashion.com:

1. Gautam Singhania (Raymond Ltd) - Personal net worth of $1.4 billion. The apparel category alone is forecast to grow at an impressive 8 percent annually, reaching $59.3 billion by 2022

2. Ambani (Reliance) - Asia's richest man with a net worth of $45.2 billion

3. Rakesh “Big Bull” Jhunjhunwala - Net worth is estimated at $2.8 billion. His most valuable holding is watch and jewellery maker Titan Company (a subsidiary of Tata) worth close to $700 million.

4. Micky Jagtiani (Landmark Group) - Net worth $4.8 billion

5. Radhakishan Damani - $12.2 billion can be traced back to the 2017 IPO of D-Mart, his chain of 160 stores across India selling fashion basics and home goods.

6. Pallonji Mistry (Tata Group) - Worth $14.7 billion

7. Kumar Mangalam Birla - Net worth of $11.9 billion. Own Aditya Birla $44.3 billion (revenue)

8. Arvind Limited’s current patriarch Sanjay Lalbhai (net worth $1.1 billion) is known as India’s “denim king”

9. Sunder Genomal, who along with his two brothers boasts a net worth of 2.7 billion, is managing director of Bangalore-based Page Industries Ltd

10. Kushal Pal Singh Tewatia - (net worth $4.5 billion) DLF Emporio

11. Chandru Raheja, of the K. Raheja Corp Group - $3 billion personal net worth.

12. Bansal brothers ,Flipkart - Net worth of $1.3 billion each in 2015.

13. Kishore Biyani - Net worth of $2.4 billion comes from the Future Group

14. Ramesh Kumar Dua - $1.05 billion personal fortune

15. Ratan Tata - Total $70 billion


Source: businessoffashion


CONCLUSION:

We know that the value of a domain name depends on how much a company prepare to pay. It also depends on the need, the strength on demand and competitions among global fashion companies.


Say, Louis Vuitton may want to spend only 2% of its total market value of the business ie 2% of $53.5 billion dollars or $1.07 billion for Fashion.com as marketing cost.


LV can redirect its organic traffics from Fashion.com to LouisVuitton.com in order to increase 6% from organic traffic and therefore boost sales. LV's annual revenue will increase from previous 10% to 16% (6% + 10%) growth ie $8.56 billion to $62.06 billion ($53.5b+$8.56b) for the Fashion.com business.


Therefore, by investing 2% of its total market value of the business as a marketing cost for Fashion.com, LV is able to generate 6%, with a net growth of 4% in revenue. It is a very attractive deal to secure Fashion.com for monetisation, and not to be missed out to other global fashion competitors.


Same thing may apply to Nike and Zara. Based on 2% market value, Nike can offer $728m (91000 Bitcoin) and Zara can offer $573m (71625 Bitcoin) to secure Fashion.com


Similarly, Nike and Zara may like to pay 4% of its market value ie $1.456 billion (182000 Bitcoin) from Nike, $1.146 billion (143250 Bitcoin) from Zara.


Based on 1% market value of business, Louis Vuitton can pay $535 million (66875 Bitcoin), Nike $364 million (45500 Bitcoin) or Zara $286.6 million (35825 Bitcoin)


(Based on 7/10/19 ie. 1 btc = $8000)


Whatever happened on auction day 24th Oct, Fashion.com is up for grab! Good luck to buyers and seller.


For auction details, please contact Peter at PeterJohnston@nailimited.com.


Full article can be found on Fashion.com regarding the auction procedure and overview, private bidding phase, public bidding phase, public-private winner and payment closing escrow,


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