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Richemont in Net-A-Porter deal

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 31 Mar 2015

Net-A-Porter - a subsidiary of Swiss luxury goods company Richemont - is set to be merged with the Yoox Group.

Richemont, home to brands such as Mont Blanc pens, said today it would merge the unit with Yoox, a "global Internet retailing partner for leading fashion brands". Yoox operates through entities such as yoox.com, thecorner.com and shoescribe.com, as well as with numerous mono-brand online stores.

Yoox is an Italian company and is listed on the Italian stock exchange, Borsa Italiana. Earlier this month, Reuters reported Amazon was in talks to buy online luxury retailer Net-a-Porter in what could be the biggest acquisition yet for the e-commerce giant.

Richemont notes its merger deal is conditional on Yoox shareholders' agreement, and a meeting at which stockholders will vote is set for June. After the deal, the new company will be renamed as Yoox Net-A-Porter Group.

Natalie Massenet, founder and executive chairman of the luxury online retailer, will continue in her role as executive chairman, while Federico Marchetti, founder and CEO of Yoox, will be CEO of the new entity.

Richemont, which did not disclose a deal value, notes it will receive 50% of the shares of the combined entity's listed parent company, but its voting rights will be limited to 25% so the new group can maintain its independence.

After the deal has been wrapped up, the new entity will increase its capital by EUR200 million so it can "fund future growth opportunities and allow for the entry of strategic investors". Richemont is expected to participate in this capital increase.

Richemont chairman Johann Rupert says the company is "proud of Net-A-Porter's achievements under the leadership of Natalie Massenet, ably assisted by a wonderful team of professionals". He notes established business models are being increasingly disrupted by the technological giants.

"It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry. The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands."

The deal should be wrapped up in September.

Vestact notes Richemont bought Net-A-Porter in 2010, valuing it at $250 million at a time when it was "not altogether sure where all of this was going". It adds it is hard to try and strip profits and revenue out of Richemont's financials.

However, if Yoox doubles the number of shares in issue, Richemont's stake will be worth EUR1.6 billion, or around 4% of Richemont's market capitalisation, says Vestact.

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