Richemont Snaps Up Yoox Net-à-Porter As Luxury Battle Moves Further Online
In the latest demonstration of how e-commerce is the without doubt new front line in the luxury wars, Swiss conglomerate Compagnie Financière Richemont (CFRUY) said on Monday it was buying the rest of leading online luxury retailer Yoox Net-à-Porter in a $3.3 billion deal.
Richemont, whose portfolio includes such luxury brands as Cartier, Panerai, and Montblanc, is acquiring the stake in YNAP that it doesn’t already own in what is not a big deal financially by its own standards but one that is key to helping it compete more online.
“With this step, we intend to strengthen Richemont’s presence and focus on the digital channel, which is becoming critically important in meeting luxury consumers’ needs,” said Richemont Chairman Johann Rupert in a statement.
YNAP, with offices in London and Milan, has quickly emerged as a top online destination for luxury shoppers with popular sights such as yoox.com and mrporter.com. Net-à-Porter, bought by Yoox from Richemont and other owners in 2015 for $1.4 billion, has been a particularly deft competitor for U.S. luxury stores such as Neiman Marcus and Nordstrom. (JWN). Yoox provides many brands with the tech and logistics needed to sell luxury products online. That includes brands like Dolce & Gabbana and Stella McCartney. The space is proving essential to luxury conglomerates: last year LVMH (LVMHF) launch its own shopping website and mobile app, 24 Sèvres.
The move comes at a time luxury sales online are booming: in October, consulting firm Bain & Co estimated that online sales of personal luxury goods would represent 25% of total sales by 2020, up from about 9% currently. But watches, a major focus for Richemont (its brands also include A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen) are still not a big category online.
YNAP revenue came to $2.4 billion last year, up 11%. The company faces a fast growing rival in Farfetch, a privately held online marketplace for hundreds of independent luxury boutiques and brands.