Yahoo Finance Wall Street raider threatens to gatecrash online fashion world
The activist investor Dan Loeb has stoked expectations of a shake-up in the world of high-end fashion online, after it emerged he has built a stake in Richemont, owner of the loss-making retailer Yoox Net-a-Porter (YNAP).
The involvement of Third Point, Mr Loeb's investment firm, has been revealed weeks after Richemont signalled to investors it could seek to offload YNAP.
The Swiss-headquartered company, which is valued at more than £60bn and also owns the French fashion house Chloe, took control of YNAP three years ago in a €2.7bn (£2.3bn) deal after it first invested in Net-a-Porter in 2010, ahead of its merger with competitor Yoox.
However despite initial high hopes, YNAP and its rivals Farfetch and Matchesfashion have struggled to make returns amid strong competition and pressure from powerful fashion houses which take the lion's share of profits. Last year the division of Richemont including YNAP reported an operating loss of $223m on sales of $2.2bn.
Last month, Matchesfashion sounded the alarm over its ability to operate in its current form after it was battered by the pandemic, and warned that it could breach banking covenants.
Analysts have speculated that Richemont could reduce its stake below 50pc, allowing Farfetch to take a stake as a prelude to consolidation. Alibaba, the Chinese online retailer empire, has also been named as a potential investor in YNAP in light of its joint venture with the company in the Far East.
Flavio Cereda, a retail analyst at Jefferies, said: “Richemont seems to have a problem running YNAP.
“Whether they sell it, form a joint venture - they need to do something to improve its performance. The market would not be unhappy if Richemont decided it needed some kind of solution for it.”
Third Point's arrival on the shareholder register is a rare challenge to Richemont's South African chairman Johann Rupert, 71, who owns a 9pc financial interest but controls the company via outsized voting rights.
Richemont is the second European corporate titan Mr Loeb, 59, has targeted in recent weeks. Last month he revealed a $750m stake in Royal Dutch Shell and called for the energy giant to be split up.
Third Point’s views on Richemont and the size of its investment have not been revealed.
During the company’s annual meeting with investors in September, Mr Rupert said in relation to YNAP that after years of absorbing “heavy investments, we are now finally seeing other parties willing and eager to share the evolving platform”.
He said Richemont would update investors later in the year. The company will report its half-year results on Friday. Mr Rupert founded Richemont in 1988 as a spin-off of Rembrandt Group Limited, a company established by his father Anton Rupert in the early 1940s.
He acknowledged in May that rival Kering, which owns Gucci, had suggested a tie-up “more than a year ago”, but he insisted that he had no intention to sell the firm.
In recent years Richemont has had to grapple with a subdued performance online, at its Swiss watchmaking business and a couple of its fashion labels. Cartier also faces stiffer competition since its French rival LVMH bought Tiffany & Co.
Richemont declined to comment. Third Point did not respond to a request for comment.
