Richemont is selling a stake in its ecommerce business YNAP to designer marketplace and technology company Farfetch. One aim of the sale is to remove perceptions of data sharing among rivals since the deal makes YNAP a “neutral and open platform” for the luxury industry.
YNAP, which merges technology company Yoox and luxury retailer Net-a-Porter, will become 47.5% owned by Farfetch. In exchange, Swiss luxury company Richemont will receive 50 million Farfetch shares. Dubai Mall developer Mohamed Alabbar will acquire 3.2% via his Symphony Global operation. YNAP has been operating at a loss, so the sale also comes with a €2.7bn write down, according to Richemont.
The move sees Richemont brands opening ecommerce concessions on the Farfetch Marketplace while also utilising Farfetch technology for their own ecommerce and omnichannel ambitions.
YNAP will also adopt Farfetch platform solutions to advance its own growth strategy and shift towards a hybrid business model.
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’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. We have adjusted YNAP’s valuation to bring it in line with today’s market environment and will receive, in exchange, shares in Farfetch, further aligning our interests. As a supportive shareholder and a Luxury New Retail partner, we will look to build the perfect platform for the future, enabling the luxury industry to flourish in an increasingly digital economy.”
José Neves, Farfetch Founder, Chairman and CEO said: “Today, Farfetch and Richemont advanced significantly our Luxury New Retail vision for the digitisation of luxury. This significant partnership unequivocally establishes Farfetch as a pre-eminent global platform for luxury.
“We are excited to acquire 47.5% 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.”
Confirming that the option remains open for Farfetch to acquire the remainder of YNAP, he said: “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.”
Mohamed Alabbar, Founder and owner of Symphony Global, commented: “YNAP is one of the most coveted global luxury shopping destinations and the partnership with Farfetch, by continuing to develop YNAP’s marketplace business, will further enhance the experience for its brand partners and discerning clientele.
“I am also confident that our deep understanding of the Middle Eastern luxury market, with its tech-savvy and influential customers, will be of great value to YNAP going forward.”
Farfetch is ranked Leading in RXUK Top500 research.
