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Richemont buys Yoox Net-a-Porter, becoming the first major luxury holding company with a serious ecommerce operation

To-the-point analysis about one of the five important stories from the week.  

Why it’s interesting

  • Richemont’s purchase caps quite a journey for YNAP. Richemont owned a controlling stake in Net-a-Porter before it merged with Yoox, which gave Richemont a 50% stake in the combined group—now it will own close to 100% of the entity.
  • While YNAP will retain the same management, it’s not that healthy to change owners and culture so many times in such a short span of time. Employee attrition is worth watching.

Why it matters

  • Richemont’s latest move makes it the first luxury holding company to have a serious ecommerce operation, putting it ahead of Kering and LVMH. Kering has a deal with YNAP to handle the ecommerce for all of its brands while LVMH owns 24 Sèvres, which it launched from Le Bon Marché, the flagship department store it owns. However, it’s unclear what 24 Sèvres’ scale is, but it is likely nowhere near the size of YNAP, which made over $2.5 billion in sales in 2017. While Richemont likely has no incentive to cut off the deal with Kering, it should be worrisome for Kering and its brands to have a function as essential as ecommerce in the hands of a competitor. This might be positive news for Farfetch Black & White, it’s own mono-brand offering.
  • It’s still surprising that Richemont is so far ahead of the other two groups when it comes to thinking about ecommerce and digital more broadly. It speaks mostly to the power and curse of culture, and how hard it is to evolve. Maybe LVMH or Kering need to buy Farfetch before it goes public, since it’s going to take years to build up a competitive skill set all by itself.

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