Luxury web shops Yoox and Net-a-Porter are to merge into a new online retailer, worth 1.2 billion euro in turnover.
From 350 million to 1.5 billion euro
Founded in 2000 by Natalie Massenet in London, Net-a-Porter was subsequently sold to Richemont for 350 million euro. The Swiss luxury concern poured a lot of money into the web shop, quadrupling its sales over the past few years.
CFO Gary Saage had to divulge some weaknesses though: "Ever since we bought Net-a-Porter in 2010, the competition has only grown and that has resulted in lower-than-originally-expected operational margins."
Yoox and Net-a-Porter will now merge into Yoox Net-a-Porter Group, which will start its operations in September under Richemont's control. The Swiss company will get 50 % of shares, but only a 25 % say "to guarantee the independence of the new company". That means that Yoox will have the actual operational control within the new group.
Net-a-Porter is still onerous
Yoox was founded 15 years ago by Federico Marchetti and has French Kering (including Gucci and Bottega Veneta) as its most important client. It managed a 13.8 million euro net profit on a 524 million euro turnover. Net-a-Porter on the other hand, managed a 770 million euro turnover in its latest fiscal year (2013-2014), with a 20 million euro net loss in the end. Nevertheless, that is an improvement over the previous year.
Several days ago, a rumour surfaced that Amazon wished to purchase Net-a-Porter, but "a deal with Amazon was never in the cards", according to sources in Milan.