Yoox Confirms It Is in Talks With Net-A-Porter
Online clothing sellers discussing possible "business combination".
Richemont SA said on Monday that it is discussing a possible tie-up with Italy’s Yoox SpA, a deal that could create an online luxury retailer with revenues of more than $1.3 billion ($1.36 billion).
Geneva-based Richemont said that its Net-A-Porter unit, which sells high-end brands ranging from Jimmy Choo shoes to Balenciaga ladies wear, was in talks about a “business combination” with Yoox. Milan-based Yoox also confirmed the talks, which came after intense media speculation over a possible deal between the companies.
A union of the two companies could create a powerhouse in the online fashion industry, combining two of the leading websites for luxury clothing and accessories. Yoox has a market capitalization of €1.3 billion, while analysts estimate Net-A-Porter could be worth close to £1.5 billion ($2.2 billion).
A tie-up would represent a significant shift in strategy for Richemont, which has been trying to build Net-A-Porter on its own. Richemont, which also owns jeweler Cartier and watchmakers Piaget and IWC, has said that it wouldn’t sell any of its businesses and has invested in struggling lines rather than getting rid of them.
The talks between Richemont and Yoox come as Net-A-Porter approaches an important deadline. Richemont established an incentive plan for Net-A-Porter’s management team when it took control of the fashion retailer in a 2010 deal valuing the online business at £350 million. The incentives, a package of stock options, give Net-A-Porter executives, including founder and executive chairwoman Natalie Massenet, 7% of the unit, according to Reuters.