The March agreement between fashion retailer Yoox Group and Compagnie Financière Richemont SA, controlling shareholder of online luxury fashion retailer The Net-A-Porter Group Ltd., would create a 1.30 billion euro ($1.40 billion) company. The transaction, if approved by shareholders and regulators, will create the Yoox Net-A-Porter Group, a global online luxury fashion retailer with 2014 adjusted earnings before interest, taxes, depreciation and amortization—a common accounting distinction—of about 108 million euros ($116 million).
The merger is expected to deliver 60 million euros ($64.4 million) in annual EBITDA and capital expenditure savings by the third full year following completion, Yoox says. Approximately half that total is expected from revenue and the remainder from cost and capital spending savings. The combined companies will benefit from a single technology platform that will connect e-commerce sites and distribution centers, with a goal of “one virtual global inventory,” Yoox says. “This is expected to deliver additional sales, improved sell-through and retail margin by exposing the combined group’s offering to a wider audience worldwide.”
The two entities bring similar assets to the combined company. Yoox management expects the purchase of Net-A-Porter to be complete by September, according to a presentation created for investors and analysts.
Some comparisons:
- 2014 revenue for Yoox was 524.3 million euros ($562.5 million); for Net-A-Porter, 753.8 million euros ($808.8 million).
- Monthly unique visitors for Yoox e-commerce sites was 15.2 million; for Net-A-Porter, 9.0 million.
- Average order value for Yoox was 202 euros ($217); for Net-A-Porter, 481 euros ($516).
- Active customers for Yoox was 1.3 million, for Net-A-Porter, 800,000.
Net-A-Porter focuses on “in-season” luxury apparel sold on its e-commerce sites, including Net-A-Porter.com (women’s fashion), MrPorter.com (men’s fashion), TheOutnet.com (fashion outlet for women), and JimmyChoo.com (the online store for the high-end shoes and accessories retailer). Net-A-Porter also publishes a magazine, titled Porter, which prints six times a year and enables subscribers to purchase merchandise featured in the digital editions.
Yoox’s e-commerce sites for off-season merchandise include Yoox.com (fashion for women, men and children), TheCorner.com (luxury boutique), Shoescribe.com (women’s shoes) and a joint venture with fashion designer and manufacturer Kering, such as Bottega Veneta and Sant Laurent. Yoox calls its e-commerce sites the multibrand business. It also has a technology business, labeled mono brand, which sells e-commerce platform management and support, order and content management, merchandising, marketing and fulfillment services to other retailers.
For the year ended Dec. 31, Yoox, No. 78 in the Internet Retailer Europe 500 reported:
- Total sales of 524.3 million euros ($601.9 million), an increase of 15.1% from 455.6 million euros ($523.08 million) in 2013. That figure includes sales from online retail sites Yoox.com, TheCorner.com and Shoescribe.com, as well as the company’s e-commerce services business.
- Online sales for its multibrand business, including Yoox.com, TheCorner.com and Shoescribe.com, increased 16.3% to 381.7 million euros ($438.24 million) from 328.2 million euros ($376.81 million). The multibrand business line represented 72.8% of the company’s 2014 total revenue; by comparison, the multibrand business line accounted for 72.0% of total revenue in 2013.
- Mono-brand business revenue of 142.6 million euros ($163.72 million), an 11.9% increase from 127.4 million euros ($155.3 million).