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Richemont to Sell 47.5% of Yoox Net-a-Porter to Farfetch

The Swiss group will sell an additional 3.2 percent to Symphony Global, leaving YNAP without a controlling shareholder. The deal paves the way for Farfetch to potentially take control of the loss-making e-tailer, the companies said.
A Net-a-Porter homepage displaying a Cartier ad.
Richemont to sell 47.5 percent of Yoox Net-a-Porter to Farfetch. (Shutterstock)

Key insights

  • Richemont is selling 47.5% of Yoox Net-a-Porter to Farfetch in a deal that values YNAP at around €1 billion, materially lower than recent estimates.
  • Analysts and investors welcomed the transaction, which provides Richemont with a long-awaited exit from a costly foray into multi-brand e-commerce.
  • The move paves the way for Farfetch to dominate luxury e-commerce, powering YNAP and Richemont brands with its digital platform and broadening its customer base.

E-commerce operator Farfetch and Symphony Global, the investment vehicle of Emirati real estate mogul Mohamed Alabbar, will acquire a 47.5 and 3.2 percent percent stake in Yoox Net-a-Porter (YNAP) respectively, from Cartier-owner Richemont, the companies said in a statement.

The deal leaves Yoox-Net a-Porter without a controlling shareholder, and paves the way for Farfetch to potentially acquire the remaining YNAP shares. As part of the agreement, Richemont’s brands will also adopt Farfetch’s technology to power their digital activities, according to the statement.

“This investment and work we will do with Farfetch Platform Solutions for YNAP will pave the way to a potential acquisition by Farfetch, which would create a complementary portfolio of iconic luxury destinations, appealing to different demographics, price points and regions,” Farfetch CEO Jose Neves said.

The deal provides a long-awaited, albeit painful exit for Richemont from a costly foray into multi-brand e-commerce. The Swiss group, which acquired full control of YNAP at a €5 billion valuation in 2018, will receive shares in Farfetch valued at just $440 million, which it has agreed to hold as an investment, as well as receiving another $250 million in Farfetch shares in 5 years.

The transaction values YNAP at around €1 billion, materially lower than Richemont’s investment, as well as below recent estimates of the unit’s value. As a result, Richemont said it would claim a €2.7 billion writedown on the asset.

Still, investors and analysts welcomed the news. Bringing its stake in YNAP below 50 percent will allow Richemont to deconsolidate the e-tailer in its reporting, where the unit’s steep losses have dragged down the company’s valuation for years. Richemont shares were up more than 3 percent in early trading on Wednesday.

Richemont, which is controlled by South African billionaire Johann Rupert, has faced mounting pressure to report progress on selling or turning around YNAP, which fell behind rivals during the pandemic even as online shopping surged.

Sales and profits in the group’s jewellery houses including Cartier and Van Cleef & Arpels have boomed in recent years, but the company trades at a discount due to the drag on profits from YNAP, a governance structure that deflates the voting power of minority shareholders, and a pattern of idiosyncratic fashion investments. Activist shareholder Bluebell recently proposed a shakeup to Richemont’s governance, including an expanded board and bringing on a former Bulgari CEO, Francesco Trapani, to represent minority shareholders’ interests.

The Farfetch deal will boost Richemont’s operating profit margin by around 4.5 percent, RBC analyst Piral Dadhania said in a note to clients.

Farfetch, which reports its first-half earnings Thursday, will gain exposure to a broader base of customers by investing in its biggest rival. It’s also opened the door to acquiring major clients for its business-to-business services: providing white-label solutions for Richemont’s brands will be a boon for Farfetch’s Platform Solutions unit, which is seen as an increasingly important growth engine for the group as some key luxury brands like Gucci reduce their exposure to third-party sellers.

“This seems very good news for both companies. Richemont will finally remove YNAP from its perimeter … Farfetch secures the number two in multi-brand digital distribution,” Bernstein analyst Luca Solca wrote in a research note.

The addition of Richemont’s brand portfolio to the Farfetch platform is likely to give the e-tailer a much-needed traffic boost, Solca added. “Prima facie, this seems an excellent deal for Farfetch,” he said.

Further Reading

Cartier’s sales are booming, but its Swiss owner faces mounting pressure to clean house. Activist shareholders are likely to put governance issues and steep losses at YNAP into the spotlight.



The untold story of how Compagnie Financière Richemont agreed to merge Net-a-Porter with Yoox behind the back of Natalie Massenet for a valuation much lower than what many believed the business to be worth.



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State of Fashion 2023
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State of Fashion 2023