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YNAP plots Middle East expansion with Mohamed Alabbar partnership

Lauretta Roberts
28 November 2016

Yoox Net-A-Porter Group (YNAP) has signed a strategic partnership with Mohamed Alabbar's Symphony Investments in a bid to create the Middle East's "undisputed leader for online luxury retail".

The partnership will see Mohamed Alabbar, chairman of Symphony Investments, focus his entire online luxury retail activity in the region exclusively through the new joint venture.

YNAP will hold a 60% stake in the joint venture, which will be fully consolidated in YNAP’s accounts, while Symphony Investments will own the remaining 40%.

The JV will manage all of the YNAP's existing multi-brand online stores in the region –, Mr, and The – as well as certain existing and future Online Flagship Stores which are operated by the group and which have "significant business potential" in the Middle East.

The new company operate in the Gulf Cooperation Council countries – the United Arab Emirates, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman – but may expand to other countries in the Middle East and North Africa in the future.

An "on the ground" operation will be established by the end of 2017 to provide Middle East customers with a localised offer such as the establishment of a Dubai-based entity that will include dedicated sales & marketing, customer care and PR teams. In addition a local distribution centre will be set up as well as a localised offering ranging from Arabic-language customer care and content and local currency and payment methods.

The local and The stores will debut in 2018, while and Mr will launch in 2019, followed by select Online Flagship Stores.

Alabbar, who invested in YNAP in through subscription for a €100m capital increase in April of this year, is also the chairman of Emaar Properties and Emaar Malls, and is world renowned for successfully developing and managing The Dubai Mall, the world’s largest retail destination.

He described the Middle East as one of the fastest growing global centres for luxury retail. "The region also has a significant population of over 200m young people who are tech-savvy and influence luxury retail decisions. With this joint venture to be based in Dubai, a global business & leisure hub, we are pioneering a never-before online luxury retail experience that integrates luxury with techno-logistics," he said.

"It will redefine the retail sector, and create a brand-new way to access the world’s high-end brands brought by YNAP. A ground-breaking initiative, the JV will serve as go-to online destination for luxury retail and set new industry benchmarks in customer service, speed of delivery and diversity of choice," Alabbar added.

YNAP chief executive Federico Marchetti said: "We are thrilled by the potential of the Middle East market: combining YNAP and Mohamed Alabbar’s strengths, we look forward to giving shoppers in the region access to a fantastic luxury assortment with our unparalleled service and content. We were delighted to welcome Mohamed Alabbar as a strategic investor earlier this year and together we are now embarking on a major expansion in the region."

Symphony Investments will make a "significant cash contribution" to the joint venture, to be phased over the first three years, which will support YNAP’s expansion in the Middle East and the related investments.

The joint venture will have an "indefinite duration"; however, the agreement allows Symphony Investments to exit the after a few years of operations. In addition, the agreement envisages that YNAP will have the right to exercise a call option on Alabbar’s stake during pre-defined time periods.

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