Influencers
Awards

Editor’s Pick

Video

New technology to build a luxury e-commerce giant- Farfetch

Farfetch took a step  toward long-awaited consolidation in the luxury e-commerce world on Wednesday, agreeing to buy a significant stake in  longtime rival Yoox Net-a-Porter. 

 This agreement could help advance the goal of the current owner of Yoox Net-a-Porter, Swiss luxury group Richemont: to create a single platform for luxury brands – including luxury brands. shares of Richemont such as Cartier, Van Cleef and Arpels – to sell their products online. This kind of consolidation has become imperative for the luxury industry, despite stiff competition among its main rivals, to counter what some see as a threat to Amazon. 

 It also helps grow Farfetch, which was founded in 2007 and operates as an e-commerce technology retailer and provider. Its backers include Chinese e-commerce giant Alibaba and the Pinault family, owners of luxury giant Kering, home of Gucci, Balenciaga and other brands. 

Richemont also owns shares of Farfetch,  in which industry watchers say 2020 is a potential first step in aligning a union of Farfetch and Yoox Net-a-Porter. In November, Richemont said  it was in advanced talks to sell Yoox Net-a-Porter to Farfetch.  The deal announced  Wednesday is a step towards “building an independent and neutral online platform for the luxury industry that will be attractive to both luxury brands and discerning clientele.” Their,” Johann Rupert, Chairman of Richemont, in a statement. 

 Shares of Richemont and Farfetch rose after the announcement. 

cartier

Under the terms of the agreement, Richemont will sell a 50.7% stake in Yoox Net-a-Porter to Farfetch and an investment vehicle owned by  Qatari businessman Mohamed Alabbar. In return, Richemont will receive shares of Farfetch, equivalent to about 11% of the retailer’s shares. 

 Yoox Net-a-Porter will also adopt Farfetch’s online platform, which is capable of solving problems by upgrading its technology. 

 The deal will leave Yoox Net-a-Porter without a major shareholder, but Farfetch will have the option to buy the remainder of Yoox Net-a-Porter over the next five years, while Richemont will have the power to enforce one. such agreement if certain conditions have been met. 

 For Richemont, this activity has several goals. This not only has the potential to create a new luxury e-commerce conglomerate but also provides an outlet for the shopping headache. Born out of the 2015 merger of Yoox and Net-a-Porter, the e-commerce unit has lost money and lost market share to rivals like Farfetch. 

Recently, Richemont has faced pressure from activist investors, who have called on the company to phase out Yoox Net-a-Porter and focus on top brands like Cartier. 

Once the deal closes, which is expected to end in 2023, Richemont will no longer record Yoox Net-a-Porter’s losses on its books. The transaction will cost 2.7 billion euros, or $2.7 billion.

Corpradar is a next-gen digital IR 4.0 corporate media house that combines the power of technology with human capital to bring decisive and insight-driven content on key business affairs. In an absolute sense, we create a space for leading business houses and visionary corporate leaders to chime in with their opinions and thoughts on relevant industry-specific matters that provide a detailed expert perspective for our followers.

Leave a Reply

Your email address will not be published. Required fields are marked *

TOP