In a year that’s seen e-commerce upstarts like V-Files bring young designers to the forefront, and Farfetch become a rare fashion retail ‘unicorn’ after being valued at $1 billion, commentators have been waiting for a shake up amongst the industry’s biggest players. That shake-up came when Richemont SA confirmed it will merge Net-a-Porter with Italian rival Yoox SpA.
The historic deal will create the Yoox Net-a-Porter Group, trading on the Italian Stock Exchange – at the hotseat, it brings together former rivals in the companies’ respective founders, Federico Marchetti and Natalie Massenet. As Johann Rupert, Chairman of Richemont, stated this week, joining forces will safeguard the industry in times when established models are being increasingly disrupted. “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,” he said. In numbers, the new powerhouse will create a business with combined net revenues in 2014 of £950 millio, with some 24 million visitors to its sites every month.
There are challenges that will need to be overcome. The two sites cater for very different audiences but the fashion world is agog to see how Natalie Massenet, the former Tatler journalist turned one-woman fashion powerhouse, approaches the new challenge of a merger from this September. All that’s certain is that the deal will create more than just a fashion mega-business – the combination of the ground breaking technological architecture behind each company will be as game changing as the clothes.
The plan after the transaction is for Yoox Net-a-Porter to raise a capital increase of as much as 200 million euros ($216 million), in order to propel expansion and gain new shareholders. The deal will go into effect in September.
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