Oct 19, 2021
Richemont may be mulling a sale of YNAP, reports say
Oct 19, 2021
The giant Swiss-based luxury group which bought control of YNAP in 2018 has decided that the e-commerce platform has lost the technology race with its rival Farfetch, according to Miss Tweed, an individual reporter’s website, and The Fashion Law (TFL), a news site.
Observers have recently speculated that Richemont was less than happy with YNAP in the wake of its decision to ally with Kering, Alibaba and Farfetch in a Chinese joint venture. As part of which Kering and Richemont invested €600 million in Farfetch and €300 million in the JV.
The blog Miss Tweed generally names no sources, but cites unnamed individuals. As it does in this latest post, where it claims that Richemont’s priority is to remove YNAP from its books, by either selling all or part of the business.
Richemont has not been afraid to make brutal decisions in its dealings with YNAP, an amalgamation of London-born Net-A-Porter and Milan-based Yoox. It forced out Net-A-Porter’s founder Natalie Massenet unceremoniously four years ago, leaking that she had allegedly failed repeatedly to reach business targets. And it subsequently eased out Federico Marchetti, the founder of Yoox, who then took over the joint unit and at least ran a profitable business.
In the wake of joining the two businesses, multiple senior managers departed to rival e-commerce platforms like Matches and Farfetch. This was in part because decision making within the Richemont Group often depends on the whims of key shareholders Johann Rupert of South Africa, whose family are controlling shareholders.
Miss Tweed also cites a London-based analyst, who declined to be named, as insisting that Richemont has hinted to analysts that it no longer regards YNAP as a strategic asset. The report further claims that Rupert sent an internal memo to Farfetch CEO Jose Neves to announce a partnership with YNAP in early 2021, but that due diligence had revealed that the merger could not be completed from a technological point of view.
While TFL, in a speculative think piece entitled What is Standing in the Way of a Deal Between Richemont and Farfetch, argues “a change of control would make sense when it comes to YNAP for a number of reasons,” especially as Richemont “is not particularly well versed in the business of technology.” It cites as proof the fact that YNAP has gone through three chief technology officers in as many years.
Stay tuned for a story which can be expected to run, and run.
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