Richemont sold the 47,5% of the shares of Yoox Net-a-Porter (Ynap) in Farfetch, the Anglo-Portuguese online luxury fashion retail platform, and the 3,2% to Symphony Global one of the investment vehicles of Emirati businessman Mohamed Alabbar.
The announcement came from the Swiss luxury group itself. Thanks to this operation, therefore, Ynap will become a neutral distribution network. In return, Richemont and Ynap will adopt Farfetch platform solutions.
“This investment and the work we will be doing with Farfetch platform solutions for Ynap will pave the way for a potential takeover by Farfetch, which would create a complementary portfolio of iconic luxury destinations, catering to different demographics, price points and regions. I would like to thank Johann Rupert and Anton Rupert for their vision and look forward to working closely with them,” commented José Neves, founder of Farfetch.
"The operation aims to make Ynap a neutral platform without a controlling shareholder", reads a joint note. “It is a significant step towards realizing a dream I first expressed in 2015, which is to build an independent and neutral online platform for the luxury industry, which was very attractive to both high-end brands and their demanding clientele,” Rupert underlined.
The details of the sale
According to Richemont, upon completion of the sale of 47,5% of Ynap's share capital to Farfetch, the company will receive 53-58,5 million Farfetch Class A ordinary shares, which are expected to represent 10%-11% of Farfetch's share capital fully diluted and 12-13% of the issued share capital. Richemont will also receive 250 million dollars on the fifth anniversary of the completion of the initial phase of the operation.
Upon completion of the initial phase, Ynap will be debt-free and Richemont will make a committed credit line available for a maximum of 10 years for further 450 million dollars.
As for Alabbar, the company will buy the stake in Ynap in exchange for its shares in the joint venture with Ynap in the Gulf Cooperation Council region, allowing Ynap to take full control of its operations in the region.
Ynap's Online Flagship Store (OFS) business is excluded from the transaction and Richemont will retain the risk and return of this division.
The initial phase of the transaction, subject to the approval of the various authorities, is expected to close by the end of the calendar year 2023. The potential second and last phase of the operation expects Farfetch to increase its ownership of Ynap's share capital to 100% through a put and call option mechanism. In the event that Ynap is fully acquired by Farfetch, Richemont will have the right to appoint a non-executive director to the board of directors.
