Mytheresa to Acquire Loss-Making YNAP from Richemont, Sources Say

Richemont has finally landed a buyer for Yoox Net-a-Porter following reports this spring that the Swiss luxury goods behemoth was preparing to sell off the luxury e-commerce platform for next to nothing. Sources tell TFL that the buyer is NYSE-traded e-commerce platform Mytheresa, which is the last interested party in the mix after the likes of Bain Capital and Permira dropped out of the running, presumably over “reservations” that stem from rising losses and falling sales for Yoox Net-a-Porter (“YNAP”). 

While the timing of the YNAP transaction is not yet known (it could be a matter of days or months before the parties make an announcement), sources exclusively tell TFL that Richemont will invest between €800 million and €1 billion in a capital increase for YNAP to cover the platform’s losses. In exchange, Richemont will get to rid itself of the YNAP property, including the drag that it has continued to place in the financial statements of the Johann Rupert-led luxury goods group. This will, in turn, please analysts and investors, including activist Bluebell Capital, which has been targeting Richemont over the past couple of years. 

Still yet, the deal will enable Richemont to save face and avoid shuttering the YNAP entity in its entirety, a move that would inevitably entail sizable layoffs. (Richemont is fresh off of headlines that it will close up operations in China as part of a larger effort to “focus investments and resources on its core and more profitable geographies.”)

A Failed Attempt at E-Commerce

More broadly, an acquisition of YNAP by Mytheresa will let Richemont off the hook roughly seven years after it acquired the entirety of YNAP in a headline-making deal that was slated to transform its business and the luxury landscape as a whole. As TFL reported in April, executives at Richemont – faced with a company that barely resembles what it did back in 2018 when YNAP was valued at €5.3 billion and boasted sizable revenue growth and a firm hold on profitability – have been angling to sell the e-commerce platform.

At the root of YNAP’s post-acquisition decline are likely a few critical elements. Primarily, there has been a lack of synergy between Richemont and YNAP from the outset, with YNAP being a tech company at its core and Richemont – whose brands include Cartier, Van Cleef & Arpels, Vacheron Constantin, Jaeger-LeCoultre, IWC, and Panerai, among others – sorely lacking technological know-how. Matters were compounded by Richemont’s apparent efforts to prioritize the growth of – and investment in – its existing brands potentially over progress at YNAP (on the back of previous underinvestment in YNAP), which may have worn on the e-commerce company. 

Growth for YNAP was almost certainly stunted even further by a number of distractions at play. In addition to intensive “replatforming” issues for YNAP, for example, Richemont’s efforts to reach a deal with Farfetch likely diverted attention away from YNAP. After devoting years to building a partnership with Farfetch, Richemont’s deal to sell YNAP to Farfetch fell through in December 2023 when Farfetch revealed that its assets would be acquired by Korean e-commerce giant Coupang in a rescue buy-out.

What Mytheresa Stands to Gain

The landscape for the deal is rife with issues – and there are questions to be asked about the upsides of such a transaction for a buyer and how exactly it will play out. Mytheresa CEO Michael Kliger said in an interview in May that the luxury segment as a whole is “highly polarized” at the moment, with some “brands performing very well” and others “continuing to struggle.” The same is true on the platform side, as Mytheresa is one of the few players to remain standing steadily following Farfetch’s decline (which has brought securities fraud litigation with it) and rival Matches’ move into administration.

Kliger revealed this spring that the Munich, Germany-headquartered Mytheresa was experiencing “short term pressure” as a result of market turmoil, including on the pricing front, but that not all is lost. The market consolidation that is underway in the space is driving growth for Mytheresa, per Kliger, who stated that the company is “comfortable being in an e-commerce sector that is still growing significantly.”

Chances are, Klinger views the YNAP deal as a way to help cement Mytheresa as the sole multi-brand luxury e-commerce platform. In furtherance of this aim, the impending deal will “potentially bring more extensive distribution and more customers” to Mytheresa, including any VIP customers that may be left at YNAP, GAM’s luxury brands investment strategy manager Flavio Cereda, told TFL. But it is hardly a sure thing; “there are risks attached” to such a deal from a financial point of view, he says. 

As for what a YNAP acquisition will actually look like, it will undoubtedly be complicated. It is not immediately obvious, for instance, how Mytheresa – which generated €840.9 million in FY24 revenue – will absorb a giant like YNAP, whose revenues (which are not broken out by Richemont) may be in the realm of €2 billion, making it twice as big as its buyer. A likely first step will see Kliger clean house at London-based Net-a-Porter, where the two companies share the most extensive overlap and where NAP has a gaggle of highly-paid management. 

Beyond that, what is clear is that this is a deal of necessity for one side. Richemont is ready to have YNAP off its books and Mytheresa is the only one willing to roll the dice. “If the deal works out as planned, Mytheresa will be the biggest player in the space,” Cereda says. “And if it does not, Richemont will likely be left covering the losses.”