Rumours on acquisition resurfaced this past week and I mentioned them in second edition of 2Jour Gazette (here with a link to my broad VIP client review of major online retailers).
Today I woke up to news on Mytheresa and Richemont deal (wow, that was early!) and I can’t wait with e-Commerce till Sunday’s new issue😂. So here is what you need to know.
• MYT Netherlands Parent B.V. (“Mytheresa”) has signed an agreement with Richemont to acquire YOOX NET-A-PORTER (YNAP). This acquisition aims to create a global, multi-brand digital luxury group. In return, Richemont will gain a 33% equity stake in Mytheresa
• Transaction details
YNAP will be sold with a cash position of €555 million and no financial debt. Mytheresa will issue shares representing 33% of its fully diluted share capital to Richemont. Additionally, Richemont will provide a €100 million revolving credit facility to YNAP for a period of six years.
• Strategic Integration
The deal will integrate YNAP’s luxury division with Mytheresa, creating three distinct luxury storefronts: Mytheresa, NET-A-PORTER, and Mr PORTER. This will increase operational efficiencies by sharing technology and infrastructure.
• Off-Price Division
YNAP’s off-price division, which includes YOOX and THEOUTNET.COM will be separated to simplify operations and drive growth and profitability.
• Financial Impact
Richemont initially acquired YNAP in 2018, valuing the company at €5.3 billion. However, YNAP has struggled under Richemont’s ownership, leading to a significant €3.4 billion write-down in 2023. The sale to Mytheresa is seen as a way for Richemont to alleviate this financial burden.
• Mytheresa Dominance
As Mytheresa secures this acquisition, it solidifies its position as the most powerful luxury e-tailer. With Moda Operandi, Inc primarily focused on the U.S. market (it’s my personal statement), Farfetch struggling, and Matches(Fashion) having closed, 📌Mytheresa emerges as a dominant player in global luxury e-commerce
• Expected Timeline
The deal is expected to close in the first half of 2025, pending regulatory approvals. After the transaction closes, Richemont will have the right to nominate a member and an observer to Mytheresa’s Supervisory Board
Definitions (I was struggling😂:):
• Fully Diluted Share Capital: The total number of shares that would exist if all convertible securities (like options and warrants) were exercised
• Revolving Credit Facility: A flexible credit line allowing a company to borrow, repay, and borrow again, up to a specified limit, paying interest only on the borrowed amount
• Cash Position: The amount of cash and cash equivalents a company holds, representing its immediate liquidity or available funds
• Write-Down: The reduction in the book value of an asset when its market value falls below the carrying amount, resulting in a financial loss