Switzerland-based Richemont has upped its stake in an online luxury fashion retailer, in a move that could spark a new trend.
Richemont, headed by South African Johann Rupert, wants to buy out the rest of Net-A-Porter in a deal that values it at £350 million. The luxury goods group already owns a third of Net-A-Porter.
Imara SP Reid analyst Stephen Meintjes says time will tell whether Richemont's online move will succeed. He adds that, should the venture turn into a goldmine, Richemont may put some of its brands online through the portal.
Meintjes says this could be the start of a trend as other luxury goods companies could also move online. He adds that many of Richemont's clients are wealthy, but have little time to go shopping.
Richemont is home to luxury brands such as Cartier, Montblanc and Alfred Dunhill. It was founded in 1988 by the late South African businessman Anton Rupert. Its largest market is Europe, but its strategy is to grow in the East, which is a rapidly expanding market.
Net-A-Porter claims to be the “world's premier online luxury fashion retailer”. Its Web site is styled as a magazine and targets wealthy women. Its “readership” comprises over 2.5 million women a month.
Founder Natalie Massenet says the deal is an “incredibly important stage in the life and development” of the group. “Richemont has completely embraced our vision and strategy since they came on board as a shareholder and together we are going to continue to build the 21st Century model for luxury fashion retailing,” she adds.
Richemont chairman and CEO Johann Rupert says Net-A-Porter will remain an independent unit as a platform for third parties. “Becoming part of our group will provide the company with the support it requires to realise its business strategies.”
Net-A-Porter was established in 2000 and features collections from over 300 of the world's leading designers. The holding company's turnover was £120 million in the year to January, and it employs 600 staff in London and New York.
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