Rakuten France is closing

Online marketplace Rakuten France has announced that it closing at the end of the year. The platform was looking for a buyer, after disappointing traffic and sales. There were several potential buyers, but it now says that it did not find a viable solution with any of them.

Japanese company Rakuten took over French online marketplace PriceMinister in 2010 for 200 million euros. The French marketplace was supposed to become a main competitor of Amazon in Europe. However, in 2016, its value had already been revised downwards, to 65 million euros. This was around a third of the purchase price.

Since 2016, the company’s amount of active customers has decreased by 33 percent. Its traffic dropped 42 percent. Because of that, in May this year, the company announced that it was looking for a buyer. If a sale would not be successful, the company would shut down before the end of the year.

Multiple interested parties

Since then, several parties have expressed their interest in taking over Rakuten France. The founder of PriceMinister, Pierre Kosciusko-Morizet, for example, was preparing a bid in June. Casino (Cdiscount’s parent company), Carrefour, Pixmania and Back Market were also mentioned as potential buyers.

‘No satisfactory offers’

Now, Rakuten France has announced that it has failed to receive satisfactory offers. “Despite the efforts made by the group to complete a sale of the business, the extensive discussions held with potential buyers did not lead to a viable solution”, according to the company, in French newspaper Le Figaro.

‘The extensive discussions held with potential buyers did not lead to a viable solution’

According to management, the potential buyers were not able to meet criteria like the preservation of jobs, financial terms, and the capacity to ensure long-term viability of the business. Management has stated that the company will close at the end of this year. The website is also closing in Spain, as the two markets are run from the same structure.

Questions about sales process

One of the potential buyers, Pixmania, is currently questioning the integrity of the sales process. “One can legitimately wonder if the sales process was biased. It seems that from the outset, they knew they wanted to close the company in France rather than sell it. We believe they used us to be able to close it legally”, said Jean-Émile Rosenblum, CEO and co-founder of Pixmania.

‘It seems that they knew they wanted to close rather than sell it’

He says that Rakuten did not have the genuine intention of finalizing a sale, but that it was just fulfilling an obligation before closing. Rakuten France strongly denies the accusation. The platform also points to the fact that job preservation was an important factor. Pixmania intended to retain a third of the workforce.