- Brian Morrissey

Amazon has agreed to purchase Zappos in an approximately $850 million deal that will keep the Zappos brand separate.
 
Zappos, which has gained notoriety for building its brand through a focus on customer service and a quirky corporate culture, will continue to operate independently, according to a letter company CEO Tony Hsieh (pictured below) wrote to employees. He said that the deal, which involves Zappos investors swapping their stock for Amazon shares, would not affect the Zappos mission.
 
"We think that now is the right time to join forces with Amazon because there is a huge opportunity to leverage each other's strengths and move even faster towards our long-term vision," he wrote. "For Zappos, our vision remains the same: delivering happiness to customers, employees and vendors. We just want to get there faster."
 
Under the deal, the approximately 100 shareholders in Zappos will exchange their shares for 10 million Amazon shares. The agreement also includes about $40 million in cash and stock options for Zappos employees.
 
Zappos has in recent years moved from its familiar niche as a shoe retailer into more categories, including apparel. The company is in the midst of an agency review that is meant to help the brand communicate to consumers that it sells more than shoes.
 
Zappos business development and marketing executive Aaron Magness said the transaction would not affect the review. Zappos has heard presentations from over 20 agencies in the past two weeks.
 
Hsieh wrote that the Zappos brand would continue to operate separately from Amazon's. Zappos will operate as an Amazon subsidiary, and Hsieh said he and other top management would continue in their positions.

"Although we'll have access to many of Amazon's resources, we need to continue to build our brand and our culture just as we always have," he wrote.


Nielsen Business Media