Luxury group Richemont has agreed to sell its loss-making online retailer Yoox Net-a-Porter (YNAP) to German ecommerce platform Mytheresa in exchange for a 33 per cent stake in the combined business.

Under the terms of the deal announced on Monday, Richemont will transfer YNAP with a cash position of €555 million and no financial debt. The Swiss luxury group will also provide a €100 million revolving credit facility to support YNAP's operations. The transaction is expected to close in the first half of 2025.

The deal marks the end of Richemont's lengthy search for a solution for YNAP after a previous agreement with Farfetch collapsed when the latter was sold in December. The luxury conglomerate expects to write down YNAP's net assets by approximately €1.3 billion as a result of the transaction.

Mytheresa chief executive officer Michael Kliger said the combined group would create "a pre-eminent, multi-brand, digital, luxury group worldwide" with three distinct storefronts: Mytheresa, Net-a-Porter and Mr Porter. The off-price businesses Yoox and The Outnet will be separated to create "a simpler and more efficient operating model".

"The three brands will share a large part of their infrastructure creating synergies and efficiencies while maintaining their different brand identities," Kliger added.

Richemont chairman Johann Rupert expressed satisfaction with the deal, stating: "We are pleased to have found such a good home for YNAP. Mytheresa is ideally placed to build on YNAP's assets to further delight customers and brand partners alike across the world."

The combined group is expected to have a value of around 3 billion, with Mytheresa targeting growth to €4 billion by fiscal year 2029. The deal comes as the luxury e-commerce sector faces significant challenges, with competitors like Farfetch and Matchesfashion struggling in recent months. However, Mytheresa has emerged as one of the stronger players, benefiting from its focus on wealthy, high-end customers.

The deal marks a challenging end to Richemont's complex history with YNAP. The Swiss luxury group first acquired Net-a-Porter in 2010 and later merged it with Yoox in 2015, a move that led to the departure of Net-a-Porter founder Natalie Massenet. The business subsequently faced difficulties with a troubled technology and logistics overhaul that cost hundreds of millions of euros.

The sale reflects broader shifts in the luxury e-commerce landscape. During the era of low interest rates, investors readily funded unprofitable technology companies, including luxury ecommerce platforms seeking to capitalise on luxury brands' slow adoption of digital tools. However, the sector has since faced headwinds as luxury brands have increasingly taken control of their own online sales channels, while the end of the pandemic-era luxury boom has further pressured these platforms.

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