Richemont offloads Net-a-Porter to rival

Richemont has struck a deal to offload Yoox Net-a-Porter, its struggling online luxury business, to its German rival Mytheresa after a previous sale agreement collapsed.
The Swiss luxury conglomerate, which owns Cartier and other high-end jewellery and fashion brands, had been looking to sell YNAP after a previous plan to sell it to Farfetch fell apart last December.
Richemont is selling the entire share capital of YNAP to Mytheresa with a cash position of €555 million and no financial debt, and will also provide a €100 million revolving credit facility to help to finance YNAP. In return, Richemont will take a 33 per cent stake in Mytheresa. The transaction is expected to close in the first half of 2025.
Richemont said it would have to take another writedown of €1.3 billion on YNAP, which owns the Net-a-Porter and Mr Porter fashion retail websites and has struggled as shoppers move away from multi-brand online platforms to buy directly from brands.
Shares in Richemont rose by 2 per cent to close at 133.50 Swiss francs (£119.39). The stock has risen by about 20 per cent in the past year.
The company had struck a deal in 2022 to sell YNAP to the London-based, New York-listed luxury fashion retailer Farfetch but it was scrapped after the latter’s share price collapsed amid mounting losses.
Farfetch was founded as a high-end online retailer in 2007 and later branched out into bricks-and-mortar shops selling more than 1,400 brands through boutiques and department stores, with labels including Prada, Versace and Bottega. Insiders say things went wrong for Farfetch when, buoyed by a successful period during the pandemic, it expanded its offering too quickly.
YNAP has been experiencing losses and declining sales since it was acquired by Richemont in 2018. Analysts cited a lack of synergy between the two companies and YNAP’s operational costs have weighed on Richemont’s bottom line.
Mytheresa, which has bucked the trend in the luxury goods sector with solid financial performances of late, said the new group had the potential to achieve gross merchandise value (GMV) of €4 billion by 2029. The current combined GMV of YNAP and Mytheresa is €3 billion.
It said it planned to create a new luxury division with three distinct “door fronts” — Mytheresa, Net-a-Porter and Mr Porter — and the off-price division, comprising YOOX and the Outnet, will be separated entirely from the luxury division.
Mytheresa, which has American depositary receipts trading in New York, has a market capitalisation of about $368 million. The company was founded in 1987 as a boutique in Munich by Susanne and Christoph Botschen. The company opened its online shop in 2006, making it one of the first online boutiques for luxury women’s fashion.
Analysts at Stifel said they saw Mytheresa as “a logical buyer of YNAP given its core digital luxury competences and the group’s ability to extract synergies and efficiencies given that Mytheresa, Net-a-Porter and Mr Porter will share a large part of the group’s infrastructure”. They added that Richemont could benefit from the sale as it will “retain some exposure, a 33 per cent stake, to a leading luxury multi-brand platform”.
Piral Dadhania, of RBC Capital Markets, agreed that the transaction would give Richemont the opportunity to “retain some exposure to online multi-brand luxury retail without operational control”.