Luxury conglomerate Richemont has confirmed that it is selling its stake in online fashion retailer Yoox Net-A-Porter (YNAP) to Farfetch and Alabbar, while also announcing its brands and YNAP will be switching to Farfetch Platform Solutions as part of its Luxury New Retail vision.
Richemont said in a statement that Farfetch will acquire a 47.5 percent stake in YNAP, while Symphony Global, one of the investment vehicles of Mohamed Alabbar will take 3.2 percent, meaning that YNAP will be a neutral platform with no controlling shareholder.
The deal also laid the path, through a put and call option mechanism, towards Farfetch potentially acquiring the remaining shares in YNAP.
Johann Rupert, chairman of Richemont, said: “Today’s announcement is a significant step towards the realisation of a dream I first voiced in 2015 of building an independent, neutral online platform for the luxury industry that would be highly attractive to both luxury brands and their discerning clientele.
“We knew back then that if we wished to control our own destiny and protect the uniqueness of the luxury industry as it was digitalised, we would need to collaborate as the task was too big to undertake on our own.”
Farfetch and Alabbar acquire stakes in Yoox Net-A-Porter
The luxury giant, which owns brands including Cartier, IWC and Van Cleef & Arpels, said the partnership will also allow Richemont and YNAP to leverage Farfetch’s technology platform to advance its Luxury New Retail programme.
YNAP will adopt Farfetch Platform Solutions to facilitate its shift towards a hybrid retail-marketplace model, with Richemont adding that the move will “significantly advance” the roll-out of YNAP’s marketplace offering, as Farfetch’s platform is already connected with the inventory of many of its luxury brand partners.
This shift to a first-party curated inventory ownership for YNAP with a third-party e-concession/marketplace offering is expected to improve YNAP’s financial performance, added Richemont, while also enriching the shopping experience for its customers.
YNAP and Richemont Maisons’ to use Farfetch Platform Solutions
The partnership also marks a step change in Richemont Maisons’ omnichannel distribution capabilities, with the luxury group adding they will use Farfetch’s technology platform to advance the delivery of its omnichannel strategies for its brands, which will also join the Farfetch Marketplace.
Richemont said that the Farfetch platform was “well-positioned to deliver end-to-end capabilities for the luxury industry,” and envisions "further collaboration on innovative technology solutions" will be made available to luxury brands and retailers to meet the increasing omnichannel demands of the luxury customer.
Rupert added: “Farfetch’s sophisticated technology will enable Richemont Maisons to benefit from the best route to market and realise their Luxury New Retail vision, while implementing a hybrid model at YNAP will greatly enhance its prospects.”
The addition of Richemont Maison’s e-concessions on the Farfetch Marketplace will also boost Farfetch’s offering, especially for watches and jewellery. The retail group stated that the move is a “step change” in its strategy to target hard luxury, which has a growing customer demand and represents more than 20 percent of the luxury industry globally but currently makes up just 3 percent of Farfetch’s sales.
Farfetch founder, chairman and chief executive, José Neves, said that the deal “unequivocally establishes Farfetch as a pre-eminent global platform for luxury,” and that his company was “excited to acquire 47.5 percent of YNAP and partner with Richemont in YNAP’s transformation into a hybrid business model which we believe will drive strong growth and profitability for YNAP”.
Neves added: “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.
“Our Farfetch Platform Solutions’ capabilities are perfectly tailored to the luxury industry, and that has now been recognised by Richemont’s Maisons as well as pioneering luxury e-tailer YNAP, who will all be able to elevate the digital experiences of their global customers.”