- Italian luxury e-retailer Yoox announced Tuesday its merger with rival Net-a-Porter in an all-share deal.
- The new company will be called Yoox Net-a-Porter Group, with the two companies posting combined sales of $1.4 billion in 2014, according to Yoox.
- Net-a-Porter owner Richmont will receive 50% of the new company's share capital, but only 25% of voting rights and two out of 12 seats on the board.
Online luxury retail is still a relatively small category, with many brands being slow to adapt and expand their online capabilities. But being a purely brick-and-mortar company is a business practice that will no doubt lead to failure, particularly as web-savvy millennials grow into their prime spending years. Net-a-Porter and Yoox, while not very profitable today, see this merger as a way to cut logistical and warehouse costs and retain top luxury brands.
"Established business models are being increasingly disrupted by the technological giants. It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry. The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands," said Richemont chairman Johann Rupert in a statement.