Richemont Takes Step Toward YNAP Solution as It Enters Talks With Farfetch -- Update

   By Joshua Kirby 
 

Compagnie Financiere Richemont SA says it is looking to divest control of e-commerce platform Yoox-Net-A-Porter, following mounting speculation that the Swiss luxury-goods group was looking for a solution to the loss-making business.

Alongside first-half results Friday, Richemont said it is in talks with British-Portuguese online fashion seller Farfetch Ltd, with the aim of turning YNAP into a "neutral platform" with no controlling shareholder.

For the first half of the year, Richemont's online-distributors division booked a wider operating loss from the year before at 141 million euros ($161.4 million), despite sales rising 37% to EUR1.28 billion. The wider loss was due to increased communications investments and Brexit-related customs and tax costs, Richemont said.

Prior to the results, shareholders and analysts had again been calling for a solution to the ailing YNAP, which is seen as a drag on group operating income and the share price. As well as Farfetch, which could take a minority stake in the business, other players have expressed an interest in investing in YNAP, Richemont said.

The talks also cover the exchange of technologies, with YNAP and Richemont leveraging Farfetch's tech and the group's brands being sold on the platform. No definitive agreements have been reached, and any transaction would be subject to antitrust clearance, Richemont said.

Last year, Richemont invested $250 million in Farfetch, as did Chinese e-commerce giant Alibaba, to create a joint venture covering Farfetch's operations in China. Analysts at the time suggested this could herald a way out of the online-distribution business for Richemont.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

November 12, 2021 02:11 ET (07:11 GMT)

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