Yoox and Net-a-Porter agree all-share merger deal

Net-a-Porter window Image copyright Getty Images
Image caption Net-a-Porter says its site is viewed by 2.5 million women every month

Italian online fashion retailer Yoox has agreed an all-share merger deal with London-based rival Net-a-Porter.

The deal will create a business with combined net revenues in 2014 of €1.3bn ($1.4bn, £950m)

It says the new group will attract more than two million high-spending customers and some 24 million visitors to its sites a month.

Swiss luxury group Richemont, which owns Net-a-Porter, will hold on to 50% of the shares.

But it will be restricted to only 25% of the voting rights in the new Yoox Net-A-Porter Group.

Federico Marchetti, founder of Yoox, will be chief executive of the new company.

The deal brings together Yoox's discounted out-of-season offers with Net-a-Porter's in-season lines.

E-merging fashions

The new company expects to hold a rights issue to raise up to €200m in new capital.

Mr Marchetti told reporters: "We expect the combined group to be a fantastic platform for luxury brands and we can think about luxury brands as strategic investors,"

Yoox and Net-a-Porter face fierce competition from online rivals and upmarket department stores.

The deal is expected to result in savings of about €60m euros a year.

Both companies were launched in 2000 at the height of the dotcom boom, Yoox by Federico Marchetti, a former investment banker, and Net-a-Porter by Natalie Massenent.

In 2010, Richemont, which also owns jeweller Cartier and watchmakers Piaget and IWC, bought Net-a-Porter from Ms Massenent.

The London-based site, arranged in the style of a fashion magazine, is estimated to have annual sales of €700m.

Image copyright Getty Images
Image caption Yoox chief executive Federico Marchetti will head up the new company

Yoox's business model involves buying overstocked or unsold items from previous seasons from high-profile fashion houses such as Dolce & Gabbana, Armani and Cavalli, and selling them online at a discount.

It also operates full-price online stores - what it calls "monobrand e-shops" - for the biggest fashion houses, describing them as being "powered by Yoox".

The formula is proving to be very profitable. 2014 saw its net profit rise by 9.4% to €13.8m.

Yoox's shares rose in Milan after the announcement of the tie-up, increasing by 4%.

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