Milan-based Yoox Group, whose luxury e-commerce site Yoox sells off-season luxury goods, confirmed on Tuesday that it was merging with luxury brand e-tailer Net-a-Porter, home of the $1,445 Balmain belt, $190 Agent Provocateur tulle briefs, or $2,745 Balenciaga leather jacket, reports the New York Times.
The transaction will be known as the YOOX Net-A-Porter Group, with combined revenues of 1.3 billion euros, or about $1.4 billion, in 2014, Yoox said. Federico Marchetti, the founder and chief executive of Yoox, will serve as the chief executive of the conglomerate and Net-a-Porter founder Natalie Massenet will be its executive chairwoman.
It had been rumored that Amazon was in talks to acquire luxury online retailer Net-a-Porter for close to $2.19 billion, a rumor shot down on Friday by an Amazon spokesperson. Net-a-Porter and Yoox are two of the leading websites for luxury clothing, accessories, and beauty products. Analysts estimate that Yoox is worth €1.3 billion and Net-a-Porter is worth close to $2.2 billion.
For Amazon, it's a lost opportunity to gain a foothold in the luxury market, once famously resistant to e-commerce. “With this deal, Amazon may find itself locked out of the luxury market,” said Ana Andjelic, a strategist focused on global luxury and fashion brands, told International Business Times. She said that one possible response could be that Amazon could start competing with the Yoox Net-a-Porter conglomerate, which could be costly. Or, it could acquire them both at a later date.
"Amazon had already started some time ago to invest in their fashion and luxury capabilities," said Andjelic. “Yoox has a solid presence in China and at the end, Amazon may snatch them both up. It is indisputable that now we have a new serious player to reckon with.”
Net-a-Porter, a play on the French term "prêt-à-porter," which means "ready to wear," was launched in 2000 by Natalie Massenet, a former journalist for Women's Wear Daily and Tatler, out of her New York City apartment in Chelsea. She innovated the concept of creating an online retail site as a fashion magazine where users could click on what they wanted to purchase. Net-a-Porter is updated weekly and boasts 2.5 million women visitors each month and provides worldwide express delivery.
Net-a-Porter became profitable in 2004, and in the same year, won "Best Fashion Shop" at the British Fashion Awards. Massenet sold a majority stake in Net-a-Porter to Swiss-owned Richemont in 2010, and now features over 350 designers and luxury brands, including Gucci, Yves Saint Laurent, Prada, Alexander McQueen. Some designers even create "capsule collections" to be sold only on Net-a-Porter. In 2014, Net-a-Porter created an offshoot site for designer sportswear, called Net-a-Sporter.
“Editorial content has never been our strength or priority at Yoox," Marchetti told the NYTimes, explaining that he valued Net-a-Porter's editorial eye. "But it is very important for social media, which is driving millennial sales in the e-commerce space. Smartphones now make up 50 percent of the traffic on Yoox’s websites.”
“Today, we open the doors to the world’s biggest luxury fashion store,” Massenet said, reports the NYTimes. “It is a store that never closes, a store without geographical borders, a store that connects with, inspires, serves and offers millions of style-conscious global consumers access to the finest designer labels in fashion.”