In a strategic move, luxury powerhouse Richemont announced the termination of its agreement to sell a substantial part of its online fashion and accessories entity, Yoox Net-A-Porter (YNAP), to luxury e-tailer Farfetch Holdings. This decision comes in the wake of South Korean e-commerce giant Coupang’s declaration of its intent to acquire Farfetch.
Richemont, home to iconic brands including Cartier and Piaget, had initially inked a deal to offload a 47.5% stake in YNAP to Farfetch in 2022. The agreement also involved Dubai Mall developer Mohamed Alabbar acquiring a 3.2% stake in Farfetch through his investment vehicle, Symphony Global.
«Due to the proposed transaction announced by Farfetch on December 18, 2023, the previously outlined arrangements from August 2022 cannot be finalized,» Richemont explained. Consequently, Richemont, Farfetch, and Symphony Global have mutually terminated the agreements.
As part of this shift, Richemont affirmed that it would cease integrating Farfetch platforms into its operations and refrain from opening e-concessions on the Farfetch online marketplace. The luxury group clarified that it had no financial obligations towards Farfetch and had no plans to provide financial support to the British company, which has been grappling with losses.
Richemont indicated that it did not anticipate the repayment of the $300 million in convertible notes issued by Farfetch in November 2020 as part of a joint venture investment in China. The carrying value of these notes in Richemont’s accounts stood at 218 million euros ($238.03 million) as of November 30, 2023.
Furthermore, Richemont emphasized that its businesses would maintain independence on their existing platforms and had not integrated Farfetch technology. Looking ahead, the luxury conglomerate expressed its intention to seek a new partner for YNAP.
«In light of the termination of agreements with Farfetch and Symphony Global, Richemont will reassess options for YNAP to leverage its strengths and potential under new leadership,» the luxury group affirmed.
