With the deal announced on Monday, Richemont patron Johann Rupert may have finally achieved his goal: a global internet platform for luxury goods. The online adventure cost him a lot of money.
There is a major merger in the online retail of luxury goods. As it became known on Monday morning, Mytheresa, the Munich-based online platform for luxury fashion, is taking over the Richemont subsidiary Yoox Net-a-Porter (YNAP), which specializes in e-commerce. In return, the Geneva-based luxury goods group Richemont will hold a third of Mytheresa’s shares in the future.
Mytheresa will migrate YNAP to its platform, but will continue to operate the existing online shops independently. There will therefore be three websites, Mytheresa, Net-a-Porter and Mr Porter, which will use the Mytheresa technology.
Richemont is handing over its online subsidiary to Mytheresa along with a cash balance of 555 million euros and no financial debt. In addition, Richemont will provide the buyer with a credit line of 100 million euros. The transaction is expected to close in the first half of 2025.
Luxury goods are also increasingly being purchased online
Luxury brands are increasingly relying not only on expensive physical locations, but also on online sales channels. It has been shown that inhibitions about buying luxury goods online are decreasing. Today, almost all well-known manufacturers – the two watch brands Rolex and Patek Philippe are notable exceptions – have their own online shops.
But Johann Rupert, the patron of the Geneva-based Richemont Group, had a bigger vision from the start: He wanted to establish a specialized online retailer for all luxury brands. This should not only offer Richemont brands such as Cartier, Van Cleef, IWC or Chloé, but also other luxury labels such as Hermès, Louis Vuitton, Prada or Gucci.
Richemont invested in online trading early on, first through Net-a-Porter from 2003 and then through the Italian platform Yoox. But the Geneva-based company never really got off to a good start with its online subsidiary, also because the other luxury goods groups did not want to outsource their online business to a Richemont platform and instead went their own way. At some point, YNAP was chronically in deficit and the technology was no longer up to date.
The revaluations of the first few years, when there was hardly any competition, were followed by write-offs after write-offs. Richemont has already had to accept 2.5 billion euros in impairments since the full takeover of Net-a-Porter in 2010. And now there is talk of a write-off of 1.3 billion euros when selling to Mytheresa.
A giant in luxury e-commerce
YNAP has been on Rupert’s sales list since 2022. It initially looked like a quick solution: As early as the summer of 2022, it was said that the previously very successful Internet marketplace Farfetch would become a major shareholder in Richemont’s luxury goods platform YNAP – with the option of even taking over the platform entirely at some point.
However, this deal collapsed at the end of 2023. Farfetch, behind which the Portuguese entrepreneur José Neves is, was practically insolvent. The company was just able to save itself through an emergency sale to the South Korean online retailer Coupang.
Since then, Richemont has been looking for a new owner for YNAP. This didn’t turn out to be that easy. Because these are challenging times for the luxury goods market.
One of the few luxury e-commerce companies that is holding up well is the portal Mytheresa, which emerged from a Munich boutique. The online retailer, which has been listed on the New York Stock Exchange since 2021, grew by 10 percent in the 2023/24 financial year.
The secrets of Mytheresa’s success are, on the one hand, its leading technology in e-commerce and, on the other hand, the fact that the top customers on the online marketplace are motivated to make ever larger purchases. The average order value in the past financial year (at the end of June) was 703 euros. To achieve this, Mytheresa also relies on real-world experiences. Michael Kliger, the boss of Mytheresa, wants to bind customers to his shop primarily through exclusive events, as he recently confided to the “Handelsblatt”.
A huge treasure trove of data
With the YNAP takeover, Mytheresa now has the opportunity to establish itself as the only brand-independent online retailer for luxury goods in the Western world. In the investor call, Mytheresa boss Kliger particularly raved about the huge customer database that the company would be tapping into with this purchase. According to Kliger, YNAP adds another 3.6 million luxury customers to Mytheresa’s approximately 850,000 active customers.
The fact that Mytheresa is successful with YNAP would definitely be in Johann Rupert’s spirit. With the 33 percent stake in Mytheresa and the right to a seat on the board of directors, Richemont will continue to have a foot in the promising digital business.