Online shopping giant Amazon is rumoured to be in talks to buy the hugely successful London-based luxury fashion e-tailer Net-a-Porter, thought to be worth in the region of €2 billion. This move will give to the giant the possibility to enter also the luxury e-commerce world.
In fact, according to Women’s Wear Daily, Amazon has been looking to buy a luxury e-commerce company and the financial community is abuzz with the prospect of Compagnie Financière Richemont spinning off Net-a-porter, which it purchased in 2010 and is not a core part of its hard luxury business.
Asked generally about Net-a-porter’s future at Richemont, Luca Solca, managing director at Exane BNP Paribas, said a possible scenario is for the luxury group to monetize the value of the fashion e-tailer, and sell it to a company willing to invest in pure-play luxury retail in the long term.
“One ideal candidate for that could potentially be Amazon,” Solca told WWD. “Amazon needs a separate mall to engage in luxury credibly, sort of what Tao Bao does with Tmall.” Earlier this year, Solca floated the idea of an initial public offering or divestment of Net-a-porter, and said it would be “a positive” for Richemont.
Specific details are unclear, with both sides refusing to comment, but it is not the first time that Net-a-Porter.com’ser, Compagnie Financière Richemont, is thought to have shopped around for a buyer. In 2013, it was rumoured that fellow online retailer Yoox was in talks to buy the luxury fashion and beauty shopping site, but the group issued a statement categorically denying the claims.
Richemont, a Swiss-based holding company which also owns international luxury brands Cartier, Piaget, Azzedine Alaïa and Van Cleef & Arpels, bought the remaining shares in Net-a-Porter.com in 2010 after investing in the company early on. Then, the business was valued at £350 million. Insiders estimate that it could now be worth in the region of £1.5 billion.
But, let’s discover what’s Net-a-porter in details.
The Net-A-Porter Group Limited is the world’s premier online luxury fashion retailer; it’s award-winning website, presented in the style of a fashion magazine (Porter, as you can see in the video below), offers the style – savvy customer exactly what she wants – unprecedented access to the hottest looks of the season from international cutting – edge labels via worldwide express delivery. Since launching in June 2000, Net-a-porter has successfully established itself as a luxury brand, with impeccable packaging and unrivalled customer care. The pages of the portal feature high fashion editorial, updated weekly with new content and product, which is viewed by over 2.5 million women each month. Moreover, the group has also dedicated a specific portal to men: MRPORTER, the global retail destination for masculine style, combining the best international menswear with editorial content and selling over 300 leading international brands. Finally, also a fashion outlet (THE OUTNET.COM) is part of the group.
The company is still searching for a CEO, after the going out of the former CEO Mark Sebba last July. In 2014, the e-tailer would have reduced its losses to £12,9 million (more or less €18 million). Sales increased by 22,6% up to £532,6 million (€671,2 million) in the wake of new investments and thanks to a significant growth in all markets, particularly in the US and in Asia-Pacific.
Founded by former fashion journalist Natalie Massenet in 2000, she is thought to have netted £50 million when selling her stake to Richemont in 2010. The US-born businesswoman stayed on as an investor and executive chairman and is also chairperson of the British Fashion Council.
Amazon has made no bones of wanting to own a very large slice of the fashion e-tail pie; this summer it will open a 46,000 sq ft fashion photography studio in Shoreditch in a bid to match fashion retailers’ approach to presenting stock. It is also sponsoring the inaugural men’s fashion week in New York in July and has hired a handful of top-level staff from the fashion publishing industry to turn its passion for fashion into a credible shopping destination.
Amazon founder Jeff Bezos recently told Sunday Times Style that it wants to “own” global fashion retail and in the words of one of its buying team, plans to “strive to offer the earth’s largest selection – if there’s customer demand, we want to stock it.” In 2012 he also told the New York Times that the company wabted to dive uinto high-fashion in particular because the gross profit per unit was much higher for luxury clothes. Moreover, in 2013, Amazon said fashion was its fastest growing category.
Fancy clothes and accessories certainly aren’t the first thing to come to mind when you think “Amazon,” but the company has been revving up its focus on luxury fashion since 2012, when it started signing contemporary and high-end brands, including Michael Kors and Vivienne Westwood.
So, let’s see what it would happen!