What is Next for Net-A-Porter?

In late August, Farfetch bought a 47.5 percent stake in the fashion retailer. This move gives Farfetch the majority hold in the company, and the opportunity to acquire the remaining shares at a later date.

The majority stake, previously owned by Richemont, was sold to Farfetch (47.5 percent) and Emrait businessman Mohamed Alabbar (3.2 percent). This deal is a step towards making the business a ‘neutral platform with no controlling shareholder’, a press release explained.

Richemont is a Swiss Group that houses luxury brands such as Cartier, Van Cleef & Arpels, The Outnet and Piaget, among others. It was founded in 1988 by South African businessman Johann Rupert, who now acts as Chairman.

“The announcement is a significant step towards the realisation of a dream I first voiced in 2015 of building an independent, neutral online platform for the luxury industry that would be highly attractive to both luxury brands and their discerning clientele,” explained Rupert. “We knew back then that if we wished to control our own destiny and protect the uniqueness of the luxury industry as it was digitalised, we would need to collaborate as the task was too big to undertake on our own.”

The deal between Farfetch and YNAP is expected to be finalised by the end of 2023.

In conjunction with the 47.5 percent stake from Farfetch, Mohammed Alabbar will acquire a 3.2 percent stake. He is the founder and owner of Symphony Global, which partnered with YNAP in 2016. Of the acquisition, Alabbar commented that his expertise in the Middle Eastern luxury market and their ‘tech-savvy and influential’ customers will be of  ‘great value to YNAP going forward’.

“I am delighted at the opportunity to build further on my long-standing relationship with Richemont and YNAP, and participate, this time, in the realisation of their Luxury New Retail vision,” he said. “YNAP is one of the most coveted global luxury shopping destinations, and the partnership with Farfetch, by continuing to develop YNAP’s marketplace business, will further enhance the experience for its brand partners and discerning clientele.”

From Rivals to Partners

Any fashion lover knows that Farfetch and Yoox Net-A-Porter (YNAP) are rivals. The two online retailers that specialise in luxury fashion have worked in parallel, but with this partnership, they are now meeting in the middle.

In a statement from Richemont, YNAP will benefit from Farfetch’s ‘sophisticated’ technology to help YNAP realise its ‘Luxury New Retail vision’. Moreover, this partnership will accelerate YNAP’s hybrid model.

“We have adjusted YNAP’s valuation to bring it in line with today’s market environment and will receive, in exchange, shares in Farfetch, further aligning our interests,” read the press release. “As a supportive shareholder and a Luxury New Retail partner, we will look to build the perfect platform for the future, enabling the luxury industry to flourish in an increasingly digital economy.”

Farfetch’s Tech Advancements

The foundr, Chairman and CEO of Farfetch, José Neves, explained that the joining of two retail platforms advances the vision of digitisation of luxury goods. “This significant partnership unequivocally establishes Farfetch as a pre-eminent global platform for luxury,” he said.

Farfetch’s current Platform Solution is a key tool that YNAP will implement into its strategy. The platform and end-to-end commerce solution is specially created for luxury goods and is enabled across other retail platforms, including Harrods, Browns, and luxury Maisons.

Using these systems, YNAP will shift towards a hybrid marketplace model. Richemont will also adopt the Farfetch Platform Solution to the operations of its Maisons to accelerate its omnichannel strategies.

In 2018, Power Retail discussed the ever-growing demand for the online presence of luxury retailers. Houses such as Gucci, Louis Vuitton and Prada have adopted e-commerce, whereas legacy brands like Chanel are sluggish in online adoption, choosing an in-store experience instead (Chanel acquired a minority stake in Farfetch in 2018).

The shift towards e-commerce has been slow for legacy retailers and Maisons, but the demand from shoppers is prevalent. Major moves from the likes of Farfetch and YNAP are signs that the digital push is here to stay, and retailers need to adopt it if they want to advance.

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