Farfetch Marches On As It Acquires Majority Stake In Yoox Net-A Porter

Luxury online fashion powerhouse FarfetchFTCH
has taken another step in its growing domination of the luxury goods sector with the announcement that it is to acquire Swiss luxury group Richemont’s majority stake (47.5%) of Yoox Net-a-Porter (YNAP).

Emirati businessman Mohamed Alabbar will take another 3.2% stake, with Farfetch to pay Richemont between 53 to 58.5 million Farfetch shares, as well as $250 million worth of shares five years after the deal is completed.

Alabbar’s smaller stake means that YNAP will effectively be a neutral platform with no controlling shareholder. However, this situation is unlikely to last as Farfetch will have the option to acquire the remainder of YNAP.

The move comes less than three months after Marcus Neiman Group (MNG) announced the closing of a $200 million common equity minority investment by Farfetch.

In 2018 Richemont bought a 95% controlling stake in the loss making luxury retailer and now, with less than 50% stake, it will allow the luxury company to de-consolidate YNAP.

YNAP Joins Farfetch Platform

As part of the deal, YNAP will adopt Farfetch’s technology platform, Farfetch Platform Solutions, as part of its its digital strategy, adding that the move will “significantly advance” the roll-out of YNAP’s marketplace offering because Farfetch’s platform is already connected with the inventory of many of its luxury brand partners.

Richemont said it will use Farfetch’s technology platform to push forward delivery of its omni-channel strategies for its brands, which will also join the Farfetch Marketplace.

Richemont chair Johann Rupert said: “Today’s announcement is 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.”

NMG Deal With Farfetch

After signing commercial agreements with Farfetch Platform Solutions on May 31, NMG said it will use the proceeds to accelerate growth through investment in technology and digital capabilities.

Geoffroy van Raemdonck, CEO of Neiman Marcus Group, said of the deal: “Farfetch’s investment demonstrates its confidence in our omni-channel strategy, and we look forward to partnering with them to continue revolutionizing the luxury customer experience and delivering value to all our stakeholders.”

Founded in 2007 by José Neves and launched in 2008, Farfetch began as an e-commerce marketplace for luxury boutiques and has enjoyed an extraordinary ascent.

Today, the Farftech Marketplace connects customers in over 190 countries and territories with items available from more than 50 countries and over 1,400 brands, boutiques and department stores.

Additional Farfetch businesses include Browns and Stadium Goods, which offer luxury products to consumers, and New Guards Group, a platform for the development of global fashion brands.

In May Farfetch reported revenues for the first quarter of the fiscal year 2022 increased by 6.1% year-over-year to $514.8 million, driven by a 9.3% growth in its digital platform revenue.