Richemont in discussions with Farfetch to merge platforms and cede control of YNAP

Farfetch and Richemont have confirmed they are in discussions on a deal to create a single "neutral" omichannel platform to further the digitisation of the global luxury industry, in a deal which would ultimately lead to the spin-out of YOOX NET-A-PORTER Group (YNAP) from Richemont. 

Both companies confirmed the talks today saying a deal could lead to Farfetch taking a minority stake in YNAP, along with other investors, Richemont brands (which include Alaia, Chloé and Cartier) joining the Farfetch marketplace and Richemont brands using Farfetch technology to power their e-commerce.

Richemont, which took full control of YNAP in 2018, said the talks were taking place against a backdrop of other industry players having expressed an interest in investing in YNAP, Richemont and Farfetch. It added that the "ultimate objective" for the talks was for "YOOX NET-A-PORTER to be a neutral platform, with no controlling shareholders".

The move follows the recent news that activist investor Dan Loeb of the hedge fund Third Point LLC had taken a stake in Richemont, but CEO of the Swiss-based luxury group Johann Rupert denied this had been the catalyst for the talks.

Talking to analysts earlier today, Rupert said: “We’ve been signalling this for a year now. It’s not activist pressure or anything at all.”

Richemont has already taken a stake in Farfetch's Chinese business and it entered into a joint venture with Farfetch and Chinese giant Alibaba which began operating last August, in what some believed was a precursor to Richemont spinning off YNAP.

It is understood that some luxury brands have resisted joining YNAP platforms given they are run by a competitive luxury conglomerate. Rupert had previously invited rivals LVMH and Kering to invest in YNAP arguing the need for one large global platform for luxury, but they ultimately declined to do so.

Under the deal being discussed with Farfetch and other investors, no one shareholder would have more than 50% of voting rights in YNAP, but the parties have both insisted there is no guarantee at this stage that any deal would be reached.