U.K. Watchdog Gives Green Light to YNAP, Farfetch Deal
LONDON — The sale of a majority stake in Yoox Net-a-porter Group to Farfetch cleared a key hurdle on Wednesday after the U.K. Competition and Markets Authority approved the transaction which was announced last August.
The CMA said in a brief statement that it had approved the deal and that a full text of its decision would be published in due course. It is not planning any further investigations into the companies.
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In January, the CMA said it was considering whether the transaction would have resulted in “a substantial lessening of competition within any market, or markets, in the United Kingdom for goods or services.”
It had invited comments on the transaction from interested parties.
As reported, YNAP’s parent Compagnie Financière Richemont plans to sell a majority stake in Yoox Net-a-porter Group to Farfetch and Alabbar, YNAP’s partner in the Middle East.
On completion of the deal later this year, Richemont will hold a 49.3 percent stake in YNAP. Over the next five years, Farfetch is expected to acquire the entirety of YNAP, subject to certain conditions.
In exchange, Richemont will receive Farfetch shares, expected to represent 12 to 13 percent of Farfetch’s issued share capital. The two partners have said they plan to work together to accelerate the quality and global penetration of the Richemont brands online.
Going forward, the Richemont maisons will leverage Farfetch technology, and sell via e-concessions on the Farfetch Marketplace.
In a report following Wednesday’s announcement, Barclays said the CMA approval was “a positive for Richemont, and removes a potential downside risk that the deal does not get completed.”
The wheels of the deal are already in motion: In the first six months of fiscal 2023, Richemont reported a loss of 766 million euros following the noncash write-down of assets linked to the proposed sale of a majority stake in YNAP.
Richemont chairman Johann Rupert has said the new alliance will “realize my long-standing goal of making YNAP a neutral, industry-wide platform, with no controlling shareholder.”
He added that “it was never Richemont’s dream, or intention, to own an online business.” Rupert said Richemont originally took full control of YNAP because its former shareholders had wanted to sell their stakes.
Rupert said the planned sale of YNAP to Farfetch will allow Richemont “to deliver on its global digital strategy” and, at the same time, “to focus on what it does best.”
He said the plan is to continue building brand equity at the company’s luxury maisons without having to worry about running a digital business.
The deal with Farfetch, he declared, will be “transformative for all of luxury, and not for a select few. It will transform big and small companies throughout Europe” by allowing them to set up shop with help from tech-savvy Farfetch.
Founder and chief executive officer José Neves said Farfetch’s tech will be “a game-changer for Richemont’s brands, and allow them to operate in a hybrid marketplace that is open to the entire industry.” The deal, he added, will double the gross merchandise value of Farfetch.
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