LONDON – Richemont has finalized a long-awaited deal aimed at digitizing the luxury business, merging its Yoox Net-a-porter platform with Farfetch.
While the initial deal means that the new, neutral platform currently has no majority owner, the deal will eventually see Farfetch acquire the majority stake in YNAP, subject to certain conditions.
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The luxury giant said Wednesday that Richemont, Farfetch and Symphony Global, one of the investment vehicles of Mohamed Alabbar, had entered into ““a landmark transaction” with the acquisition by Farfetch and Alabbar of a 47.5 percent, and 3.2 percent stake, respectively, in YNAP.
The agreement also sees Richemont and YNAP adopting Farfetch Platform Solutions, which means the companies will sell their merchandise using Farfetch’s digital expertise.
“This represents a significant step in achieving Richemont’s vision of making YNAP a neutral industry-wide platform, and, through a put and call option mechanism, lays a path towards Farfetch potentially acquiring the remaining shares in YNAP, bringing together these highly complementary businesses. The partnership also marks a step change in Richemont Maisons’ omnichannel distribution capabilities,” Richemont said Wednesday.
The luxury giant, owner of brands including Cartier, IWC and Van Cleef & Arpels, said the partnership will mean that Richemont and YNAP will leverage Farfetch’s technology platform to advance its Luxury New Retail program.
Furthermore, YNAP will adopt Farfetch Platform Solutions to facilitate its shift towards a hybrid retail-marketplace model.
Richemont will also use the Farfetch platform to advance the delivery of the omnichannel strategy of its maisons, which will also join the Farfetch marketplace, boosting, among other categories, Farfetch’s watches and jewelry offering.
Richemont said that the Farfetch platform is “well-positioned to deliver end-to-end capabilities for the luxury industry,” and it “envisions further collaboration on innovative technology solutions to be made available to luxury brands and retailers to meet the increasing omnichannel demands of the luxury customer.”
The planned merger of YNAP with Farfetch was announced by Richemont’s chairman Johann Rupert late last year, and fulfils Rupert’s ambition of creating a neutral platform for luxury digital sales while allowing Richemont to move ahead without the YNAP business, which had been a drag on Richemont’s bottom line.
Rupert said the announcement was a “significant step towards the realization 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.”
José Neves, Farfetch founder, chairman and CEO, said 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. 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.