UK's competition body investigates Richemont-Farfetch deal for YNAP

By

Nigel TAYLOR

Published
Feb 1, 2023

UK’s Competition and Markets Authority (CMA) is looking into Farfetch’s aim to buy a stake in Yoox Net-A-Porter, owned by Swiss luxury goods group Richemont, claiming it might reduce competition in the UK market.

Richemont sold 51% of Yoox to London-based Farfetch and Dubai businessman Mohamed Alabbar last summer for an undisclosed sum in what was seen as major news on the luxury e-tail front. The plan was for Farfetch to acquire 47.5% and Alabbar 3.2% in Yoox Net-A-Porter, “making YNAP a neutral platform with no controlling shareholder”. However, Farfetch has an option to acquire the remainder of YNAP.

With approval needed, the CMA is now looking into the deal. On the CMA’s Gov.com website, the body said it is investigating the transaction and has “launched its invitation to comment”, dated 31 January. 

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It added that the case page will be updated when the CMA formally commences its phase 1 investigation “considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.

To assist it with this assessment, the CMA “invites comments on the transaction from any interested party”.

At the time of the initial complex transaction, Richemont chairman Johann Rupert said the deal would be a step towards his ambition of building an “independent neutral online platform for the luxury industry” that would attract both high-end brands and their customers.

Richemont also said it will use Farfetch’s technology platform to advance the delivery of its omnichannel strategies for its own brands, which will join the Farfetch Marketplace.

Those brands — including AZ Factory, Baume & Mercier, Cartier, Chloé, Dunhill, Jaeger-LeCoultre, Montblanc, Van Cleef & Arpels and more — would also open e-concessions on the Farfetch Marketplace.