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High-fashion etailer Net-a-porter to merge with Yoox Group
31
Mar '15
Richemont, of which high-fashion online retailer Net-a-porter is a subsidiary, has entered into a binding, conditional agreement to merge the operations of the Net-a-porter Group with Yoox Group in an all-share transaction.
 
Listed on the Italian stock exchange, Yoox Group is the global Internet retailing partner for leading fashion and design brands. It has established itself amongst the market leaders with the multi-brand online stores yoox.com, thecorner.com and shoescribe.com, as well as with numerous mono-brand online stores.
 
The merger agreement is conditional upon the approval of Yoox shareholders at a meeting which it is expected to be held in June 2015, Richemont said in a press release.
 
Upon completion of the transaction, the combined entity will be renamed ‘Yoox Net-a-porter Group’, and will continue to be incorporated in Italy. Net-a-porter Group founder and executive chairman Natalie Massenet will serve as executive chairman while Yoox founder and CEO Federico Marchetti will be the CEO of the combined entity.
 
According to the agreement, Richemont will receive, in aggregate, on a fully diluted basis 50 per cent of the share capital of the combined entity’s listed parent company. However, in order to preserve the independence of Yoox Net-a-porter Group, Richemont’s voting rights will be limited to 25 per cent.
 
Once the transaction is complete, expected in September 2015, after shareholder and regulatory approval, Richemont will appoint two representatives to the combined company’s board of directors, which will have a minimum of twelve members.
 
The Group is expected to launch a capital increase of up to €200 million to fund future growth opportunities and allow for the entry of strategic investors. Richemont is likely to participate in this capital increase.
 
“Richemont has been a pioneer in luxury e-commerce, first as a minority shareholder of Net-a-porter in its infancy and then as a controlling shareholder since 2010. We are proud of Net-a-porter’s achievements under the leadership of Natalie Massenet, ably assisted by a wonderful team of professionals,” said Johann Rupert, chairman of Richemont. 
 
“Established business models are being increasingly disrupted by the technological giants. It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry. The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands,” Rupert added.
 
The transaction will generate a one-off, non-cash, accounting gain in Richemont’s financial statements for the year ending 31March 2016 of approximately € 317 million (at both the pre- and post- tax levels), based on currently available information, the press release said. (RKS)

Fibre2fashion News Desk - India


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