Last spring, Net-a-Porter and Yoox announced that the two luxury e-commerce sites would merge into the new Yoox Net-a-Porter Group conglomerate. Those in the know have been tight-lipped about details of the merger, but as one of the biggest company sales of the year, it’s been the topic of a lot of market buzz. “It’s under the spotlight, and all brands are watching. Yoox and Net-a-Porter were two leaders, two number-ones in their respective areas,” Federico Marchetti, chief executive officer of the newly formed Yoox Net-a-Porter Group, told WWD. “When two leaders are joined, they draw more attention. Also, this was an innovative merger, the first in the luxury online arena.”
Of course, that’s not the only reason for all the secrecy. On the surface, the merger looked like one of the most amicable and seamless transitions in business, but behind the scenes, several of Net-a-Porter’s original backers have been fighting against the deal since the start. The New York Times reports that minority shareholders never wanted to sell, and believed that the Swiss luxury conglomerate Richemont, the company’s majority shareholder, was selling the business at “far too low a price.”
Reportedly Carmen Busquets, an early Net-a-Porter investor, found a group that was willing to purchase the online retailer for more than Yoox had offered. Natalie Massenet, Net-a-Porter’s founder and executive chairwoman also claimed she was talking to buyers who were willing to offer over 50 percent what Yoox was offering. Busquets even wrote to the board directly, explaining that there were better offers available and that “shareholders will want to understand why your management chose to donate over £400 million and possibly even £500 million of their money to the shareholders of Yoox.”
Despite the dispute over buyers and offers, the merger went through in October to the tune of $1.4 billion, and caused Yoox stock to climb 22 percent since the announcement and 41 percent by the time the merger was complete. Shares for the new Yoox Net-a-Porter Group have grown 22 percent. After the merger, Busquets sold her shares to Richemont, retaining only a 2.3 percent stake in the business, while Massenet sold the entirety of her shares and resigned from her post shortly after the merger was complete. Only time will tell if the merger (and its low selling price) will hurt or improve the growing online luxury market.
