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