Thursday 25 August 2022 – The Monocle Minute

Opinion / Natalie Theodosi

Retail shake-up

It’s one of the biggest mergers that the fashion industry has seen in recent years. Yesterday, luxury conglomerate Richemont announced the sale of 47.5 per cent of its online platform Yoox Net-a-Porter (already the offspring of consolidation in the sector) to online retailer Farfetch. Investment vehicle Symphony Global bought an additional 3.2 per cent, leaving YNAP with no majority shareholder. The news raises tough questions about the future of online retail.

Farfetch, founded by Portuguese entrepreneur José Neves, has long pitched its marketplace model – allowing brands to manage their online inventory – as a better alternative to YNAP’s classic wholesale business, where a buying team selects and purchases stock that it wants to show. You can now expect YNAP to move towards the Farfetch model and Neves has also suggested that he could fully acquire the company.

The landmark deal radically shifts the fashion industry’s power structure, turning Farfetch into a behemoth after multiple recent acquisitions including Condé Nast’s fledgling fashion news platform, beauty retailer Violet Grey and Milan-based New Guards Group. Richemont chairman Johann Rupert, meanwhile, said that the deal was part of a broader vision to create an independent online platform for its luxury brands, such as Cartier. But offloading the loss-making YNAP was no doubt the biggest motivator. “This seems like very good news; Richemont will finally remove YNAP from its perimeter, a continuing source of losses,” says Luca Solca, a luxury analyst at research firm Bernstein.

As for the original Net-a-Porter group, its star seems to be fading after a tumultuous decade that included a merger first with Yoox and later with Richemont. Its golden era as the industry’s top retailer, run by founder Natalie Massenet and complemented by elegant editorial content, is gone. The deal is also a sign that the luxury e-commerce model as we know it no longer works. Whether on online marketplaces or their own sites, brands are looking to regain control.

Natalie Theodosi is Monocle’s fashion editor.

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