Richemont, the owner of renowned brand Cartier, has announced that it is scrapping its plan to sell a part of its online fashion and accessories business, Yoox Net-A-Porter (YNAP), to luxury online retailer Farfetch Holdings. This decision comes in response to the recent news that South Korean e-commerce giant Coupang intends to acquire Farfetch. Initially, Richemont had agreed to sell a 47.5% stake in YNAP to Farfetch by 2022, with the deal also involving Dubai Mall developer Mohamed Alabbar taking a 3.2% stake in Farfetch through his investment vehicle Symphony Global.
However, with Farfetch’s new transaction announcement, Richemont has terminated the agreements. Consequently, Richemont will no longer utilize Farfetch platforms for its businesses nor open e-concessions on the Farfetch online marketplace. The luxury goods group has clarified that it has no financial obligations towards Farfetch and does not plan to offer any loans or investments to the company, which has been facing losses.
In addition, Richemont has stated that it does not expect repayment for the $300 million in convertible notes that Farfetch had issued in November 2020 as part of a joint venture in China. These notes were valued at 218 million euros ($238.03 million) in Richemont’s accounts as of November 30, 2023.
Richemont has made it clear that its various businesses will continue operating on their respective platforms and will not adopt Farfetch technology. The company has also expressed its intention to search for a new partner for YNAP. Under new leadership, Richemont aims to reevaluate its options for YNAP in order to optimize its strengths and potential.
This decision by Richemont highlights the changing landscape of luxury retail and the significance of adaptability in the face of evolving market dynamics. As the digital sphere continues to transform, luxury brands need to meticulously consider their partnerships and strategies for online expansion. Richemont’s reassessment of its plans for YNAP showcases the company’s dedication to finding the most favorable path forward for its online presence, aligning with partners that share its vision for growth and success.
[Link 1 – https://www.ft.com/content/6f6f8c2b-cb98-4573-831d-9b4c398f8f41] [Link 2 – https://www.reuters.com/business/retail-consumer/richemont-scraps-farfetch-deal-looks-new-partner-touch-cosign-2022-09-27/]
