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Farfetch deal for Yoox Net-A-Porter stake probed by competition watchdog

Lauretta Roberts
31 January 2023

The UK competition regulator has said it will probe Farfetch’s deal to buy a stake in online luxury rival Yoox Net-A-Porter.

Last year, luxury goods conglomerate Richemont agreed to sell its 47.5% stake in Yoox Net-A-Porter to global luxury marketplace Farfetch.

As part of the deal Richemont secured a minority interest of around 12% to 13% of Farfetch, as well as agreeing to use the platform for Richemont brands, which include Chloé and Cartier.

The Competition and Markets Authority (CMA) said on Tuesday that it was now examining whether the deal amounts to a merger.

The watchdog said it would then assess whether this deal “may lead to a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.

The CMA appealed to other parties to comment on the process before a deadline of 14 February.

The sale agreement required Richemont to take a non-cash write down of around €2.7 billion on the value of YNAP. Richemont also agreed to sell a further 3.2% stake to Dubai Mall developer Mohamed Alabbar via his Symphony Global operation.

The deal between the three parties has put and call options that would allow Farfetch to acquire the remainder of YNAP in the next five years or for Richemont to sell to another investor or list the shares.

At the time of the deal, Richemont’s chairman, Johann Rupert, said it would be a step towards his ambition of building an “independent neutral online platform for the luxury industry that would be highly attractive to both luxury brands and their discerning clientele.

"Farfetch's sophisticated technology will enable Richemont Maisons to benefit from the best route to market and realise their Luxury New Retail vision, while implementing a hybrid model at YNAP will greatly enhance its prospects. We have adjusted YNAP’s valuation to bring it in line with today’s market environment and will receive, in exchange, shares in Farfetch, further aligning our interests. As a supportive shareholder and a Luxury New Retail partner, we will look to build the perfect platform for the future, enabling the luxury industry to flourish in an increasingly digital economy."

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