U.S. Markets close in 6 hrs 28 mins

eBay Buys PhiSix Fashion Labs

Zacks Equity Research

eBay Inc. (EBAY) recently announced the acquisition of a 3D apparel simulation company, PhiSix Fashion Labs. However, the financial terms of this aqui-hire deal were undisclosed.

As per the agreement, the giant online marketplace plans to incorporate the technology into many of its channels such as the marketplace, mobile apps, and also eBay Enterprise, which is used by third-party wholesalers.

PhiSix Fashion Labs, founded in 2012 by Jonathan Su, is a computer graphics company that makes 3D models of different types of clothing from photos, sample files and other sources. The customers can actually see how they would fit and look in different clothes.

3D apparel simulation means testing the fit of a garment on customized, realistic models and alteration of clothing samples depending on the virtual fit. It eliminates the need for physical trials, assuring an accurate fit even in case of online shopping.

With a significant increase in the number of customers buying clothes through websites, the online apparel business is undergoing many changes to be able to produce clothes that look good and fit well.

The latest acquisition will help eBay fulfil these requirements. It will also increase its customer base worldwide by instilling some confidence in buyers who are skeptical of buying clothes online and help them get rid of the hassle of returning ill-fitting clothes.

Another positive for eBay is that the acquired technology will reduce shipping costs related to product returns.

Currently, eBay holds a Zacks Rank #4 (Sell).

Some better-ranked stocks worth considering from the same sector include Autobytel Inc. (ABTL), Liberty Ventures (LVNTA) and Netflix, Inc. (NFLX). While Autobytel and Liberty Ventures have a Zacks Rank #1 (Strong Buy), Netflix holds a Zacks Rank #2 (Buy).

Read the Full Research Report on EBAY
Read the Full Research Report on LVNTA
Read the Full Research Report on NFLX
Read the Full Research Report on ABTL

Zacks Investment Research