JSE-listed Richemont has announced it will merge its high-fashion online retail business Net-A-Porter with Italy’s Yoox, a global Internet retailer for fashion brands that owns websites such as yoox.com, thecorner.com and shoescribe.com.
The agreement is conditional upon the approval of Yoox shareholders at a meeting which is expected to be held in June this year.
The merged Yoox Net-A-Porter Group is expected to launch a capital increase of up to €200m (about R2,6bn) to fund future growth opportunities and allow for the entry of strategic investors. Richemont is expected to participate in this capital increase.
The combined entity will be incorporated in Italy and continue to be listed on Borsa Italiana.
Natalie Massenet, founder and executive chairman of The Net-A-Porter Group, will serve as executive chairman of the merged entity, while Federico Marchetti, founder and CEO of Yoox Group, will be CEO.
Richemont will hold 50% of the combined entity’s share capital, although its voting rights will be limited to 25% “to preserve the independence of the Yoox Net-A-Porter Group”.
Richemont has committed to a lock-up period of three years in respect of shares equivalent to 25% of the total share capital of the combined entity, the company said.
Upon completion, Richemont will appoint two representatives to the combined company’s board of directors, which will have a minimum of 12 members.
“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,” said Richemont chairman Johann Rupert in a statement.
“The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands,” he said.
The transaction is expected to be completed in September 2015 after shareholder and regulatory approval.
The company said the transaction will generate a one-off, non-cash accounting gain in its financial statements for the year ending 31 March 2016 of approximately €317m. — © 2015 NewsCentral Media
