Richemont pulls out of YNAP deal after Farfetch sale
Published: Monday, Dec 18th 2023, 17:51
Updated At: Monday, Dec 18th 2023, 17:51
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The luxury goods manufacturer Richemont is withdrawing a contract for the planned sale of part of the online fashion and accessories business Yoox Net-A-Porter (YNAP) to Farfetch. The reason: the struggling British online luxury retailer Farfetch is being taken over by the South Korean e-commerce giant Coupang.
As a result of the transaction announced by Farfetch on December 18 (today), the Geneva-based luxury goods group stated on Monday that it would not be able to conclude the agreements with the company. Richemont, Farfetch and the third partner in the group, the investment company Symphony Global owned by Arab Mohamed Alabbar, have jointly terminated their agreements to sell shares in YNAP.
As is well known, Richemont wanted to build an online platform for luxury goods together with Farfetch. The Geneva-based group was to sell 47.5 percent of its online subsidiary YNAP to the British online retailer and 3.2 percent of Alabbar. In return, Richemont would have received Farfetch shares. However, with the sale of Farfetch to the South Koreans, these plans have now become obsolete.
Convertible bond will probably not be repaid
Richemont specifically stated that it could assume that the 300 million dollar senior convertible bond issued by Farfetch to Richemont in November 2020 would not be repaid. The book value of these bonds on Richemont's books amounted to 218 million euros as of November 30, 2023.
The joint plans between Richemont and Farfetch were originally announced in August 2022. Now, not only these plans, but also the adoption of the Farfetch platform solutions by most Richemont Maisons and YNAP, as well as the opening of e-concessions on the Farfetch marketplace by several Richemont Maisons, would be canceled.
The company now has "no financial obligations" to the luxury goods platform Farfetch and does not intend to grant it loans or invest in it, Richemont added.
Search for a new partner
Richemont is now looking for a new partner for YNAP, it added. "As a result of the termination of the contracts with Farfetch and Symphony Global, Richemont will reassess the options for YNAP in order to best utilize its strengths and potential under the new leadership," the luxury group said.
Farfetch shares were suspended from trading on Wall Street on Monday after the takeover by Coupang was announced. The Korean company's shares subsequently lost value. At 4.30 p.m. Swiss time, they were down 3.1 percent on the New York Stock Exchange. The Richemont share, for its part, lost 1.9 percent in Switzerland.
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