Richemont to buy online luxury retailer for $3.3bn

Bloomberg

Richemont agreed to take full control of online luxury retailer Yoox Net-a-Porter SpA for about 2.7 billion euros ($3.3 billion), reflecting ecommerce’s inroads
into the world of $5,000 Cartier necklaces and $50,000 Vacheron Constantin watches.
Investors would receive 38 euros a share, the Geneva-based luxury-goods company said in a statement. Richemont already owns 50 percent of YNAP.
The bid shows how Richemont is embracing internet shopping, abandoning initial skepticism as big online sites and a crop of startups cater to the online luxury niche. Luxury companies are increasingly finding it necessary to change strategy to adapt as shoppers turn to Amazon.com Inc. and other digital outlets for everything from cheap
T-shirts to expensive timepieces.
Swiss watchmaker Audemars Piguet last week said it plans to start a chain of standalone stores
to buy and sell secondhand timepieces as the online vintage market takes off.
Shares of the Italian company rose as much as 26 percent in early trading in Milan, matching Richemont’s bid.
“There is a possibility of a counterbid to Richemont’s offer,” wrote Sherri Malek, an analyst at RBC Europe Ltd., saying YNAP could be attractive to Amazon.com, or that YNAP could tie up with Asos Plc or Zalando SE.
Richemont is expanding a push into retail as it tries to sell more of its timepieces itself. The company built a 7.5 percent stake in Dufry AG, the world’s largest duty-free retailer, and passed on the opportunity to buy Breitling, the aviator watchmaker that CVC Capital Partners purchased.
Chairman Johann Rupert has said he prefers building Richemont’s own brands rather than overpaying to acquire new ones.
“We intend to strengthen Richemont’s presence and focus on the digital channel, which is becoming critically important,” Rupert said in the statement.
YNAP Chief Executive Officer
Federico Marchetti has committed to tender his 5.7 percent stake in the company. Richemont will give additional resources to invest in technology, logistics, hiring and marketing, he said in a statement.
In November 2017, YNAP reported third-quarter sales that were slightly below analysts’ estimates and said full-year revenue growth would be at the lower end of the company’s forecast range.