Dive Brief:
- Compagnie Financière Richemont and Farfetch received antitrust clearance from the European Commission on Monday regarding the acquisition of digital luxury retail platform YOOX Net-a-Porter, according to a release from Richemont.
- The deal, which Richemont stated has now been “unconditionally cleared” by the EC, grants U.K.-based luxury retailer Farfetch a 47.5% stake in Richemont’s digital Yoox Net-a-Porter platform, which consists of Net-a-Porter, Mr Porter, The Outnet and Yoox. In exchange, Farfetch will receive Class A ordinary shares to Richemont.
- In its release, Richemont stated that the EC “was the last regulatory authority required to provide clearance,” adding that completion of the deal “remains subject to certain other conditions that Richemont and Farfetch are working towards fulfilling.” The company said a subsequent announcement finalizing the arrangement “will be made in due course.”
Dive Insight:
Richemont’s sale of YNAP was first announced in 2022, along with most of the terms of the arrangement, so the EC approval is not unexpected. In its July earnings statement, Richemont cited a “globally challenging environment for digital distribution pure players” and presented YNAP as “discontinued operations,” thus removing the business and its related losses from the Richemont balance sheet.
Richmont previously reported a 3.4 billion euro non-cash charge, or approximately $3.6 million, on the transfer of YNAP net assets “to ‘held for sale’ at 31 March 2023” in an annual earnings statement released in May.
In its own statement about the approval on Monday, the EC said that it had “concluded that the notified transaction would not raise competition concerns, given its limited impact on competition in the markets where the companies are active. The notified transaction was examined under the normal merger review procedure.”
The deal between Richemont and Farfetch includes Mohamed Alabbar’s Symphony Global, which became a partner in YNAP in 2016. Through the new agreement, Symphony will acquire a 3.2% stake in YNAP, which Richemont’s release stated will make the e-commerce company “a neutral online platform for the luxury industry.”
YNAP and the Richemont Maisons will also adopt Farfetch’s Platform Solutions as part of the deal, and most Richemont Maisons will launch e-concessions on the Farfetch Marketplace, per the release.
Farfetch posted the same release on its site Monday.
In July, Richemont reported 14% sales growth for Q1, with total revenue of 5.3 billion euro year over year. Its Q2 earnings will be reported on Nov. 10.
Meanwhile, Farfetch posted a Q2 revenue of $572.1, down 1.3% year on year.
