Richemont sells Net-aporter to rival

Richemont struck a deal with its German competitor Mytheresa to sell Yoox Net-a-Porter to them after an earlier sale agreement failed.

The Swiss luxury conglomerate that owns Cartier, as well as other high-end fashion and jewellery brands, was looking to sell YNAP, after a previous attempt to sell it to Farfetch in December of last year fell through.

Richemont sells the entire share capital to Mytheresa, with a cash balance of €555m and no financial obligations. It will also provide a €100m revolving loan facility to help finance YNAP. Richemont will receive a 33 percent stake in Mytheresa as a return. The transaction should close during the first half 2025.

Richemont announced that it will have to write down another €1.3 billion for YNAP. YNAP owns Net-a-Porter, Mr Porter and other fashion retail websites. The company has struggled with the shift of shoppers away from multi-brand platforms and towards buying directly from brands.

Richemont shares rose 2 percent to close at 133.50 Swiss Francs (£119.39). Stocks have risen about 20% in the last year.

In 2022, the company signed a deal to sell YNAP in London to luxury fashion retailer Farfetch (listed on the New York Stock Exchange). However, the agreement was abandoned after Farfetch’s stock price plummeted amid mounting losses.

Farfetch began as an online high-end retailer in 2007. It later expanded into brick-and-mortar stores selling over 1,400 labels through department stores and boutiques, including Prada Versace, and Bottega. Insiders claim that Farfetch’s expansion of its product range was a mistake, after it had enjoyed a successful time during the pandemic.

Since Richemont acquired YNAP in 2018, the company has experienced losses and declining sales. Analysts cited a perceived lack of synergy and YNAP’s operational costs as weighing on Richemont’s bottom line.

Mytheresa has been bucking the trend of luxury goods with its solid financial performance in recent years. The new group could achieve a gross merchandise value (GMV), of €4 billion, by 2029. The combined GMV for YNAP & Mytheresa currently stands at €3 billion.

It announced that it would create a luxury division consisting of three distinct “doorfronts” — Mytheresa and Net-a-Porter — while the off-price section, which includes YOOX, the Outnet and other brands, will be completely separated from the luxury division.

Mytheresa has a capitalisation of $368 million. Its American depositary receipts are traded in New York. Susanne Botschen and Christoph Botschen founded the company in Munich in 1987. In 2006, the company launched its online store. It was one of first online boutiques to sell luxury women’s clothing.

Stifel analysts said that they viewed Mytheresa “as a logical purchaser of YNAP, given its core digital expertise and the group’s ability to extract efficiencies and synergies given that Mytheresa will share a significant part of the infrastructure of the group”. Richemont will also benefit from this sale, as they retain a 33 percent stake in a luxury multi-brand platform.

Piral Dadhania of RBC Capital Markets agreed that Richemont would be able to “retain a certain exposure to multi-brand luxury online retail without operational controls”.