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Richemont extends a hand to arch-rivals LVMH and Kering

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Richemont Chairman Johann Rupert knows how to play the game

In an attempt to compete with e-tail’s biggest players, Cartier owner Richemont has invited luxury rivals LVMH and Kering to invest in the newly combined Yoox/Net-a-Porter online fashion retailer.

At the FT Business of Luxury Summit in Monaco on Monday, Richemont Chairman (and son of its founder) Johann Rupert said: "I was speaking to (LVMH CEO) Arnault, I was speaking to Kering ... We need a platform that is big enough for the luxury goods industry. I want to create a platform that is open to everyone, it is up to them (LVMH and Kering) now. ... I think it is a too big a game for any company to dominate."

In March the Swiss conglomerate agreed to sell its high-end Net-a-Porter brand to Italy’s Yoox in an all-share deal, cementing a place as an industry leader in the booming online luxury space, with combined sales of around £1bn.

On a conference call last month, South African billionaire Rupert said his goal was to make the merged company the dominant neutral platform for the luxury-goods industry”. He added that the merger was necessary to reach optimum size and manage the ever-changing luxury landscape, and that it still needs to be larger. “This is really a big boys’ game,” said Richemont’s biggest shareholder. “It’s not for the faint of heart.”

In a joint effort, luxury retail’s crème de la crème is endeavouring to contend against the likes of Amazon.

Privately owned Chanel could be joining the Yoox/Net-a-Porter platform or another platform that would be created to showcase the work of artisans, Rupert said, referring to people who design or make luxury goods such as jewellery, watches, clothing, handbags and hats.

According to Bloomberg, Italian fashion label Armani, which already uses Yoox to sell its products, could also invest in the newly combined platform.

Last month, Arnault invested in luxury online retailer Lyst, which raised $40 million from investors including Facebook investors Accel Partners as well as Balderton Capital, which put money in Yoox and Net-a-Porter.

Kering already has a joint venture with Yoox to manage e- commerce for most of its fashion and leather goods brands, except Gucci. By combining with other brands, Yoox Net-a-Porter will make waves with a higher-end shopping experience compared to the largest online retailers, Richemont said last month. The online platform allows for the entry of new strategic investors after the merger is completed.

Published on Tuesday 09 June by Veebs Sabharwal

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