Nov 12, 2021
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Richemont in advanced talks with Farfetch on YNAP deal, H1 group sales soar

Nov 12, 2021

Luxury giant Richemont issued its latest set of results on Friday, but the biggest news was that it’s in talks with Farfetch around its loss-making Yoox Net-A-Porter business.


The firm said the “advanced” talks could see YNAP becoming a “neutral platform" with no controlling shareholder. It would be an extension of the existing partnership between the Swiss luxury group and the UK/Portugese high-end fashion e-tailer. 

And it would mean Farfetch investing directly in YNAP as a minority shareholder with other shareholders also being invited to take part in the deal. The talks also cover sharing technology, always a key issue for online retailers.

While there would be no single majority owner for YNAP, it would radically enhance Farfetch’s already huge presence in online luxury fashion. The company, which operates its own platform as well as owning New Guards Group and Browns, would also be one of the owners of Net-A-Porter, Mr Porter, The Outnet and Yoox. That could raise competition issues in some markets.

No news was released of likely timelines or even whether a deal will definitely happen and Richemont did also say that there has been interest in investing in YNAP from other parties.

As for the firm’s results, in the first half, the online-distributors division that’s dominated by YNAP saw a wider operating year-on-year loss at €141 million, even though sales rose as much as 37% to €1.28 billion. The wider loss was due to communications investments and customs and tax costs linked to Brexit.


Looking at the wider results story, Richemont said it saw a “strong performance” in the six months to the end of September. Sales rose in “strong double-digits across all business areas, channels and regions” year-on-year, and sales “also significantly exceeded pre-pandemic levels”.

Sales rose 63% at actual exchange rates to €8.907 billion, and by 65% at constant exchange rates. It saw triple-digit growth in the Americas “reaching sales levels close to Europe”, and “substantial double-digit growth in the other regions”.

The firm also saw a sequential growth acceleration from the first quarter to the second quarter that led to half-year sales up 20% compared to 2019’s H1.

Group operating profit of €1.949 million was up 331% year-on-year and by 6.7% compared to 2019, leading to a 22% operating margin. Net profit for the period rose to €1.249 billion, a 686% one-year rise and a 44% two-year increase.

The Jewellery Maisons — such as Cartier and Van Cleef & Arpels — led the way with sales for the period increasing 67%, the Jewellery Maisons generated a record operating margin of 37.9%. This outstanding performance was supported by strong watch and jewellery sales across its collections and Maisons. Overall, the Jewellery Maisons achieved a solid double-digit growth of 36% compared to the six-month period ended 30 September 2019.

Sales at the Specialist Watchmakers were 74% higher than in the prior-year period, and 7% higher on a two-year basis. This was driven by strong demand from local clientele and was achieved across all Maisons, channels and regions.

Chloe - Spring-Summer2022 - Womenswear - Paris - © PixelFormula

The ‘Other’ division that includes its fashion label such as Chloé and Dunhill saw sales rising 72%, or 66% excluding the impact of Delvaux (the world’s oldest luxury leather goods Maison acquired at the end of June).

But sales were slightly below the pre-Covid level for the six-month period, although double-digit sales growth was achieved in Q2, exceeding pre-Covid levels. The launches of the first collections from new creative directors Gabriela Hearst at Chloé and Pieter Mulier at Alaïa were “strongly acclaimed and show a promising debut”, it said.

As mentioned earlier, the group saw a 37% increase in sales at the Online Distributors and it also saw a 28% increase in Gross Merchandise Value (GMV) that was driven by double-digit growth across all regions. On a two-year basis, sales rose by 8% and GMV by 9%.

The Americas, which is the second largest contributor to sales, posted the highest growth rate. Net-A-Porter continued its development in China with its flagship store on Alibaba Tmall Luxury Pavilion now offering over 400 luxury brands. With heavy investments, the Online Distributors recorded that big operating loss previously mentioned.

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