Richemont leaves Ynap (Yoox) in Farfetch and Alabbar in financial pain
Swiss luxury giant Richemont sells its stake in the Italian-born luxury and fashion e-commerce group Ynap (Yoox-Net-A-Porter) to Farfetch and Alabbar. Facts, numbers and comments
Eventually Richemont made it to get rid of Yoox Net in Porter (Ynap). The Swiss luxury group sells the shareholding of the fashion and luxury e-commerce group, born in Italy from an idea of Federico Marchetti and for some time at a loss.
Richemont sold more than 50% of Ynap to London-based luxury online sales company Farfetch (47.5%) and an investment vehicle owned by Emirati billionaire Mohamed Alabbar (3.2%). It can be read in a note indicating that Richemont and Farfetch can respectively choose the sale and purchase for the sale of the entire share under certain conditions.
Therefore, three years after the takeover bid launched in Piazza Affari on the e-commerce company, Richemont sells the subsidiary Ynap.
According to Richemont president Johann Rupert, the sale of more than 50% of Ynap to Farfetch and Mohamed Alabbar's Symphony Global fund is an "important step towards the realization of the dream I first expressed in 2015 to create a platform online and independent for the luxury industry, which is very attractive to both brands and customers ".
The Anglo-Portuguese platform Farfetch has an option to go up to 100%. Positive comments from analysts, who define the sale as "excellent news", even if the price is "painful", reports Radiocor . The deal removes a loss-making business that had become a distraction for the Swiss luxury group from the books and Richemont shares rose 2.2% in morning trading.
All the details.
THE OPERATION
The Swiss of Richemont will no longer be the majority shareholder of the Ynap company.
Richemont, which owns exclusive jewelery and watch brands such as Cartier, Montblanc and Van Cleef & Arpels, will receive in exchange between 53 and 58.5 million Farfetch class A shares, equal to a stake between 10 and 11% of the capital of the US Group.
Upon completion of the initial phase, Ynap will be debt free, with a minimum of $ 2.9 billion in balance sheet cash. For its part, Richemont will make available, for a maximum period of ten years, a committed line of credit for an additional $ 450 million that Ynap may use at its discretion, under certain conditions.
THE WRITE-DOWN EXPECTED BY RICHEMONT
Following the transaction, a subsequent press release specifies, Richemont will classify the investment in Ynap as "destined for disposal" and for this reason it plans to record an estimated write-down of approximately 2.7 billion euros, based on the price of Farfetch on 23 August. , but which will also depend on the euro / dollar exchange rate. The value correction therefore "could change before the publication of the consolidated annual accounts for 2023"
HOW IS YNAP GOING
“Ynap therefore becomes a neutral platform, without a controlling shareholder,” the statement emphasizes.
Richemont has invested heavily in Ynap over the years, but its online distributors, which also include the Watchfinder watch market, reported an operating loss of € 210 million in the fiscal year to March.
THE GOAL OF RICHEMONT FOR YOOX
It was also agreed that Ynap and Richemont's maisons will adopt Farftech's online sales platform.
"If we want to control our destiny and protect the unique character of the luxury industry – explained Rupert – we need to collaborate, because the commitment is too great for a single subject" and the "sophisticated technology of Farfetch" will allow Richemont to “benefit from the best tool on the market”, for online sales.
As a Farfetch partner, Richemont will then help build the "perfect platform for the future" to "make the luxury industry flourish in a growing digital economy."
TOWARDS THE DIGITIZATION OF LUXURY
Farfetch founder and president José Neves spoke of the "digitization of luxury", explaining that "this significant partnership will make our company a pre-eminent global luxury platform". “I am sure – echoed Mohamed Alabbar, founder and president of Symphony Global – that our deep knowledge of the Middle Eastern luxury market, with its technological and influential clients, will make Ynap great for years to come”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/richemont-ynap-yoox-farfetch-alabbar/ on Thu, 25 Aug 2022 05:28:23 +0000.