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Who's Yoox and why does it want Net-a-Porter?
Luxury goods group Richemont (Swiss Exchange: CFR-CH) has said it is in talks over a potential "business combination" between its high-end online retailer Net-a-Porter and Italian fashion website Yoox. (Milan Stock Exchange: YOOX-IT)
The parent company of the luxury online store and jewelry brands including Cartier and Van Cleef & Arpels, Richemont issued a short statement earlier on Monday confirming the potential sale of its Net-a-Porter brand.
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"With reference to what has appeared in the press, Compagnie Financière Richemont SA clarifies that discussions are currently underway with YOOX S.p.A. regarding a potential business combination between YOOX S.p.A. and The Net-A-Porter Group Ltd.
"The company will update the market as appropriate in due course and cannot comment further at this stage," the group said.
The talks follow rumors last week that Amazon (AMZN) was in talks to buy the online luxury retailer.
Launched in 2000, Yoox is a multi-brand online fashion store with operations in China, Europe, the U.S. China and Hong Kong. It is listed on the Milan stock exchange, and posted 524 million euros ($567 million) in net revenues in 2014. Yoox shares were trading up 9.5 percent in Milan Monday on the news of the potential deal.
"A potential combination between Yoox and NAP could create the market leader in the luxury online industry, as it would offer a combination of the leading in-season (NAP) and off-season (Yoox) stores. No other players match Yoox/NAP's breadth of sourcing, client base, luxury expertise and relationships, in our view," said luxury analyst at Citigroup, Mauro Baragiola.
"If such a deal were to go ahead, we see Richemont's likely dominance in the combined entity as the only potential negative," Baragiola said, reaffirming Citi's buy rating and target share price of 23.50 euros for Yoox.
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Richemont acquired a majority stake in London-based Net-a-Porter in 2010 for around £225 million ($332 million). Shares in the group slipped around 0.5 percent after it released the statement confirming the talks.
A potential Yoox-NAP tie-up is the just latest in a flurry of activity in the high-end online market. Earlier this month, Farfetch, which puts users in touch with luxury contemporary fashion boutiques around the world, was valued at $1 billion after it announced $86 million in funding.
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