Net-a-Porter falls out of fashion: Owner Richemont to give up control of British website as losses mount
- Richemont is in ‘advanced discussions’ with Farfetch and other companies
- It did not say how much of Yoox Net-a-Porter it wants to sell – or at what price
- Richemont only took over Yoox Net-a-Porter three years ago
Setting the stage: Actress and ballet dancer Francesca Hayward models for Net-a-Porter
Cartier-owner Richemont is in talks to give up control of luxury fashion website Yoox Net-a-Porter.
The Swiss conglomerate said that it was in ‘advanced discussions’ with rival Farfetch and other companies to invest in the lossmaking business.
It did not say how much of Yoox Net-a-Porter it wants to sell – or at what price.
But it marks a stark turnaround for Richemont, which only took over Yoox Net-a-Porter three years ago.
The online group was formed in 2015 by a merger between Britain’s Net-a-Porter and Italy’s Yoox.
It sells clothing and accessories through two internet shops.
For years Net-a-Porter, which was set up by Natalie Massenet in 2000, was at the cutting edge of the online retail industry.
But the business failed to benefit from the internet shopping boom during the pandemic – when sales of high-end clothes dived as people stayed at home – and is struggling to find a foothold in a crowded industry.
Richemont says that it will invite other companies to work alongside Farfetch in trying to turn Net-a-Porter into a ‘neutral’ industry-wide platform which will have no ultimate controlling shareholder.
The new strategy came as Richemont released half-year results that showed Yoox Net-a-Porter had stayed stubbornly in the red despite sales rising by more than a third to £1.1billion.
Sales across the wider company hit £7.6billion in the six months to the end of September, up 63 per cent on 2020 and around 20 per cent higher than in 2019.
Shares in Richemont, which also owns Dunhill, fountain-pen group Mont Blanc and shotgun-maker Purdey, rose 11 per cent on the Swiss stock exchange last night.
Citi analyst Thomas Chauvet said: ‘The future is bright with these stellar results, although the announcement on Yoox Net-a-Porter rather than a spin-off might disappoint near term.’
The announcement comes days after it emerged that Third Point, the fund run by much-feared activist investor Daniel Loeb, had built a stake in Richemont. But bosses denied this had played any role in the decision and said it had long been in the works.
Cutting edge: Net-a-Porter was set up by Natalie Massenet
South African-born Johann Rupert, the chair and controlling shareholder of Richemont, said: ‘This is not in response to activist pressure at all, we started this project a long time ago.
‘Maybe some of them were listening and read this accurately so they invested and made money.’
Net-a-Porter was set up in Massenet’s flat in 2000 after finding it hard to source clothes for a photo shoot.
The American-born multimillionaire, 56, is a former Tatler journalist and ex-head of the British Fashion Council.
She used loans from friends and family to set up the web page, which was designed so users could ‘click’ to buy items they liked, and turned it into a £1.45bn retail behemoth.
Richemont first invested by buying a £50m stake from Massenet in 2003. She reinvested £15m, then sold her remaining holding for £100m when it merged with Yoox in 2015. In 2018, Richemont bought the remaining shares it did not already own for £2.4billion.
Massenet now runs her own fund, Imaginary Ventures, which has backed the seamless tights range Heist and Khloe Kardashian’s Good American jeans brand, and is a non-executive director at car manufacturer Aston Martin.