Eventually Richemont succumbed to pressure from activist funds. The Swiss giant confirmed today that it is in advanced negotiations with the online retailer, Farfetch, to sell a minority stake in Yoox Net-a-Porter (Ynap), a company born from the merger between the Italian Yoox, founded by the Italian entrepreneur Federico Marchetti, and the English Net a porter, of which the Swiss giant took control three years ago, delisting it from Piazza Affari. Like Ynap, Farfetch is an e-commerce platform, founded and led by Jose Neves. He will have to share the cake with other players (Kering, Amazon, Alibaba
) who, as confirmed by Richemont, have expressed interest in investing in Ynap.
The ultimate goal is to transform the e-commerce platform into a “neutral platform” with no majority shareholder, a move that should appease investors who are critical of the luxury giant. The market is already appreciating since on the Zurich stock exchange the share of the company controlled by the South African billionaire, Johann Rupert, jumped 8.44% to 133 Swiss francs, also thanks to the better-than-expected first half results.
Negotiations currently underway with Farfetch also involve the exchange of technologies, with Ynap and Richemont leveraging the group’s technology and brands sold on the platform. In any case, Richemont has pointed out that no definitive agreements have been reached at the moment and that any transaction will be subject to antitrust clearance.
“An early Christmas present for Richemont shareholders,” commented Jon Cox, analyst at Kepler Cheuvreux. Richemont, which owns brands like Cartier and Piaget, has invested heavily in Ynap, but the company’s persistent losses have fueled speculation about a possible sale. President Rupert explained, during the conference call on the results, that the solution for Ynap is not a spin-off or a spin-off, “but the realization of a dream” and then defended the platform: “it would not be so attractive for investors if business were as bad as critics say. ”
Pressures came from the activist hedge fund, Third Point, which according to the latest market rumors would have built a stake in the Swiss group. Artisan Partners, a longtime shareholder of Richemont, also told Reuters that they agree with activist investors that the company is significantly undervalued and the main reason is Ynap’s performance. CFO, Burkhart Grund, declined to comment on the news that Third Point has a stake in the company, but clarified that the goal is to hand over control of Ynap: “neutral platform means no controlling shareholder,” Grund explained. .
While Rupert has again ruled out the idea of ​​a merger with French luxury goods rival, Kering. “We have made a clear statement that Richemont is not for sale and we are not interested in a merger, we believe in our business,” he said. For Bernstein, the separation of Ynap from Richemont will create significant shareholder value. The broker also appreciated the company’s strong performance in the jewelry business and the improvement in the watch business.
Richemont recorded net profit growth to 1.25 billion euros in the first six months to 30 September, beating analysts’ forecasts at 1.15 billion, but the company remained grounded: “for the second mid-year, volatility is likely to persist, also in terms of inflation and geopolitical tensions “, he said, specifying that sales at constant currency rose by 65% ​​to 8.91 billion (+ 20% compared to 2019) , aided by a weak base of comparison last year as business was hit by the Covid-19 pandemic. (All rights reserved)
