Yoox Net-A-Porter shares surge on Richemont buyout news

Yoox Net-A-Porter shares surge on Richemont buyout news

Yoox Net-A-Porter shares surge on Richemont buyout news

Richemont agreed to take full control of online luxury retailer Yoox Net-a-Porter SpA for about 2.7 billion euros ($3.3 billion), reflecting ecommerce's inroads into the world of $5,000 Cartier necklaces and $50,000 Vacheron Constantin watches. It will offer EUR38 for each of the remaining 75.03%, which represents a 25.6% premium from YNAP's last closing price.

The deal values Italy's YNAP at about €3.6 billion, according to Reuters data.

Whilst Richemont has always been an early investor in the Net-a-Porter business with a minority stake in 2002, the latest bid will bring it full circle to form the world's largest and most powerful fashion e-tailer to date. The move is a way to implement its online strategy faster. LVMH, owner of Louis Vuitton, launched its own multi-brand online venture past year.

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Commenting on the offer, Johann Rupert, Chairman of Richemont, said in a statement: "With this new step, we intend to strengthen Richemont's presence and focus on the digital channel, which is becoming critically important in meeting luxury consumers' needs".

Richemont now owns 24.97% of YNAP's ordinary shares.

That doesn't mean that Richemont, or any luxury player, can rest easy, despite such e-commerce reinforcements, because their investments could inspire yet more from other corners as competition heats up, according to Bahige El-Rayes, principal in A.T. Kearney's retail practice and author of their annual retail mergers and acquisitions report.

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Marchetti added that YNAP would continue to be managed as a separate company, "providing a neutral and highly attractive platform" for luxury brands.

"The success of our various Maisons has been dependent on giving our clients the best possible products and service", he said in a statement. Marchetti said in November that YNAP's revenue growth in 2017 would come in at the lower end of its 17 to 20 per cent guidance due to hiccups in the transfer of products between warehouses for one of its e-shops.

"Today marks an historic event for the YOOX NET-A-PORTER GROUP", said Federico Marchetti, founder of Yoox and CEO of YNAP.

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