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Missteps mar Japanese e-tailer Zozo's fashion house look

Aggressive expansion creates bargain-basement image

Zozo CEO Yusaku Maezawa falls back to earth as his starry-eyed outlook for the online fashion house dims in the face of an expected profit decline for fiscal 2018.

TOKYO -- Online apparel retailer Zozo's aggressive expansion strategy is hurting its image as a cutting-edge fashion house as the site promotes private-label offerings and touts discounts, alienating longtime customers and vendors alike.

The company is expected to report its first profit decline for the year ending Sunday due to the poor performance of its private-label business. A discount program, designed to make up for the struggling house-brand operations, have angered major apparel companies that do not want to see their prices cut online.

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