Jun 9, 2015
invites rivals Richemont , LVMH to join forces online Kering
Jun 9, 2015
Cartier-owner Richemont has invited luxury arch-rivals LVMH and Kering among other peers to invest in the newly combined Yoox/Net-a-Porter online fashion retailer, the Swiss group said on Monday.
Richemont agreed in March to sell its upmarket Internet retailer Net-a-Porter (NAP) to Italy's Yoox in an all-share deal that created an industry leader in the booming online luxury market, with combined sales of 1.3 billion euros ($1.4 billion).
Consolidation and alliances among online luxury retailers are accelerating as the battle for consumers is shifting quickly from the high street to the Internet. Yoox and Richemont, when they announced the merger, said they would be looking for another luxury goods investor to back the new company.
"I was speaking to (LVMH CEO) Arnault, I was speaking to Kering ... We need a platform that is big enough for the luxury goods industry," Johann Rupert, Richemont Executive Chairman and biggest shareholder, told a conference in Monaco on Monday.
"I want to create a platform that is open to everyone, it is up to them (LVMH and Kering) now. ... I think it is a too big a game for any company to dominate."
Privately owned Chanel could also join the Yoox/NAP platform or another online venture that would be created to showcase the work of artisans, Rupert said, referring to people who design or make luxury goods such as jewellery, watches, clothing, handbags and hats.
Online fashion is attracting investors eager to gain exposure to a fast-expanding business seen as critical to future sales, particularly among Millennials, web-savvy customers born between 1980 and 2000.
Arnault has just invested in luxury online retailer Lyst, which raised $40 million from investors including Facebook investors Accel Partners as well as Balderton Capital, which put money in Yoox/NAP.
Lyst Chief Executive and founder Chris Morton told Reuters on the fringes of the conference that he believed "more has happened in the online fashion world in the past five months than in the past five years."
"2015 is really the seminal year of the online fashion retail industry," Morton added.
In April, Vogue publisher Conde Nast announced plans to use its fashion news website Style.com as an online platform to sell fashion, starting in Britain in the autumn, followed by the United States and other markets.
BIG BOYS' GAME
Rupert said last month that the Yoox/NAP merger was necessary to reach a critical size and manage the fast-changing online market, which he said was a "big boys' game ... not for the faint-hearted."
As well as Chanel, Italian fashion brands Armani, Valentino, Ermenegildo Zegna, Moncler and Dolce & Gabbana, which already use Yoox, could also invest in the newly combined platform, industry executives said on Monday.
Chanel already sells jewellery through Net-a-Porter while Kering uses Yoox to sell many of its brands online such as Yves Saint Laurent, Bottega Veneta and Balenciaga but not Gucci.
Richemont will own 50 percent of Yoox/NAP Group but its voting rights will be capped at 25 percent to preserve the company's independence.
The merger between Yoox and NAP is expected to be completed after Richemont's annual general meeting in September.
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