Yoox Net-A-Porter Merger: The Amazon of fashion?

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Yoox Net-A-Porter Merger: The Amazon of fashion?

So, Yoox is merging with Richemont Net-A-Porter to create “Yoox Net-A-Porter Group”. For most in the e-commerce retail business landscape this is the headline of the day. We’ve even started the hashtag #YxNaP in its honour. For those who are used to following Stock Market shenanigans this might sound like an old story, given the fact that these two major European luxury e-commerce platforms have been talking about this merger for at least a year now – but for those who are monitoring the stock market, it is worth noting that  YOOX hit +10% in Milano after the announcement.

What do you need to know about the deal? Well, the news was cleverly anticipated by the #BBC yesterday in an article titled Yoox and Net-A-Porter in merger talks. #Reuters is more confident, and already talks about an acquisition: An Italian retailer just acquired Net-a-Porter. As we write all the major newspapers are all publishing the news.

It’s interesting to notice that the UK media are talking about “an Italian retailer acquiring a UK retailer”, while Italian media tends to refer to it more as a “UK retailer investing in YOOX”. International diplomacy rules!

The bottom line is that the combined Italian and the British e-commerce platforms will become industry leaders with a capital value of €2.5bn (£1.8 / $2.66 bn) – a veritable powerhouse by anyone’s standards.

YOOX and Net-a-Porter’s own comments makes impact of the decision quite clear –

“Established business models are being increasingly disrupted by the technological giants,” Johann Rupert, Richemont Chairman said in a statement. “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.” Soruce: UK Business Insider

Federico Marchetti CEO Yoox said:

“This is a game-changing merger between two pioneering companies that have already radically transformed the marketplace since 2000 and will now shift the industry paradigm once again. Together, we plan to expand on our many combined successes and industry breadth to strengthen partnerships with the world’s leading luxury brands and harness a significant untapped growth potential.” Source: Business of Fashion.

We see two main positive implications in this agreement.

On one hand the two giants will be able to join their efforts in tackling the main challenges for luxury e-commerce in 2015:

  • delivery method
  • stock accuracy
  • personalization
  • mobile experience

Technological investments and marketing strategies are, after all, a fundamental combination for the growth of online retail. 

On the other hand this agreement can become a game changer in the luxury e-commerce scenario: will these two giants become the Amazon of fashion? But how will small, emerging brands be included in the new common strategy? This is where one characteristic of the Yoox business model becomes interesting: the mono-brands e-shop for the big fashion houses now appears as “powered by Yoox”. Will the new business consider the needs of smaller, emerging brands? – we hope so. Will those small brands will become part of the Yoox successful business model who brought the company to grow of +9.4% in 2014? – we think it’s vital to the lifeblood of the luxury sector. 

We’ll all discover more more on May 22nd when Richemont (owner of Net-a-Porter) will present its annual results announcement – watch this space!

Emma Perrotta and Dan Innes

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