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Shoes, books out of same warehouse? - Amazon bids to acquire Zappos.com

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By The Staff

SHEPHERDSVILLE - Two of the largest e-commerce companies in the United States may be joining forces by the end of the year.

Amazon.com and Zappos.com announced Wednesday plans to sign a “definitive agreement” where Amazon.com would be the only shareholder of Zappos.com.

The federal Securities and Exchange Commission must approve the planned acquisition.

The stock purchase price is an estimated $887 million. The companies would continue to be run separately.

The Bullitt County connection is the two Zappos.com distribution facilities in Shepherdsville. The company was recently honored by the state for its safety measures and it employs over 600 people.

In his letter to the 1,300 employees, Zappos.com CEO Tony Hsieh said, “We plan to continue to run Zappos the way we have always run Zappos - continuing to do what we believe is best for our brand, our culture and our business.”

“We think this 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 toward our long-term vision. For Zappos, our vision remains the same: delivering happiness to customers, employees and vendors. We just want to get there faster,” wrote Hsieh.

He said the purchase by Amazon could more quickly get Zappos.com to the level it wishes to reach.

In 2008, Amazon reported sales of $19.2 billion. During the same period, Zappos.com has sales of $1 billion.

Hsieh responded to the question about job security after the changes.

“We plan to run Zappos as an independent entity,” said Hsieh. “Your job is just as secure as it was a month ago.”

In terms of the future of the Shepherdsville distribution facility and outlet store, Hsieh said the arrangement might even improve the use.

“We were strategic in choosing our warehouse location due to its proximity to the UPS Worldport hub in Louisville,” wrote Hsieh. “Amazon does not have any warehouse locations that are closer to the Worldport hub. There is the possibility that they may want to store some of their inventory in our warehouse or vice versa. Right now, both Zappos and Amazon believe that the best customer experience is to continue running our warehouse in Kentucky at its current location.”

Due to securities law, Hsieh said he wished he could have informed the employees of the purchase process but that was not allowed.

“The whole point of this combination is to accelerate our growth, so if anything, we are actually anticipating more growth opportunities for everyone,” Hsieh told employees.

The Las Vegas-based Zappos.com began 10 years ago as an on-line footwear retailer but has expanded its product base to more than 1,000 shoe and apparel brands.

Amazon.com was the earliest of the large e-commerce sellers in the on-line book business in 1994. It has now grown to sell a large variety of products.

The deal should close by the end of the year.