Yoox Net-a-Porter Stake Up for Grabs as Milan Fashion Set Meets

Johann Rupert
Richemont Chairman Johann Rupert. Photographer: Chris Ratcliffe/Bloomberg

Richemont Chairman Johann Rupert’s best hope of finding a buyer for part of his company’s stake in Yoox Net-a-Porter may lie in the Italian city that for the next few days at least is the center of men’s fashion: Milan.

Gucci-owner Kering SA, Giorgio Armani SpA and Moncler SpA, all of which host shows in the Lombardy capital this weekend, are seen as candidates to answer Rupert’s call to create a dominant neutral platform for selling luxury goods online. Industry-leader LVMH Moet Hennessy Louis Vuitton SA and Burberry Group Plc, which just presented its spring-summer 2016 men’s collection in London, are said not to be interested.

Rupert said last week he invited LVMH and Kering to invest in Yoox Net-a-Porter, the company being created by a merger of businesses with combined annual sales of about 1.3 billion euros ($1.5 billion). According to the South African billionaire, luxury-goods makers need more critical mass in e-commerce to survive against the largest online vendors.

“I think Rupert is trying to push Kering into Net-a-Porter,” said Luca Solca, an analyst at Exane BNP Paribas. Acquiring a stake “would seem a natural step” for the French company, which already has a joint venture with Yoox.

Kering declined to comment. Armani and Moncler, which both sell merchandise via Yoox’s platform, didn’t return calls for comment. Of the two, Armani may be the more likely buyer because of its greater scale, according to Solca.

Rupert’s Invitation

LVMH won’t take up Rupert’s invitation, according to a person with knowledge of the matter, who asked not to be named discussing the matter. Burberry isn’t interested either, Citigroup Inc. analyst Thomas Chauvet wrote in a note Thursday after meeting the U.K. company’s management. Both companies declined to comment, as did Yoox, while Richemont and Net-a-Porter didn’t return calls.

Richemont might be willing to sell as much as half its 50 percent stake in Yoox Net-a-Porter to a sizeable luxury-goods company or media group, according to Citigroup.

The merged company plans to sell as much as 200 million euros of stock upon completion of the transaction, which is scheduled for September.

What Kering or other potential partners would have to gain from being a shareholder in Yoox Net-a-Porter isn’t obvious, according to Maureen Hinton, an analyst at researcher Conlumino. Kering’s three-year-old joint venture with Yoox to manage e-commerce for most of its fashion and leather-goods businesses already works well, and brand owners have more to gain from driving traffic to their own websites, she said.

Still, if Richemont’s Rupert is going to find an investor, they may be showing in Milan through Tuesday, as most of the brands whose e-commerce sites are managed by Yoox are Italian.

In principle, any of these “could potentially be imagined to participate in the equity,” said Exane’s Solca. Selling a stake to a company that doesn’t currently sell via the platform “would be even better.”

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