Richemont Purchases Net-A-Porter for $341 Million

Natalie Massanet

(Photo: The Wall Street Journal/Reuters)

WWD reports Richemont has purchased the remaining 67 percent of Net-a-Porter.com, becoming the majority shareholder of the high fashion e-tailer, and thus increasing its presence in the world of e-commerce. 

The Swiss luxury goods group, which already owned 33 percent of Net-a-Porter, purchased the company from a group of private shareholders for approximately 225 million pounds, or $341 million  The Wall Street Journal reports. The deal values the internet business at 350 million pounds, or $532 million. Natalie Massanet, who founded Net-a-Porter, is stand to gain 50 million pounds, or $76 million from the sale of her company, and will stay on as executive chairman, according to WWD. 

For years, luxury companies have been apprehensive about entering e-commerce, siting concerns that easy access to luxury brands would ruin their prestigious image, and turnoff their high-end clientele. Then along came Ms. Massanet, who proved that with the right combo of retail and editorial, people are willing to purchase expensive goods online. This "luxury marriage" will allow Richemont to benefit from Net-a-Porter's e-tailing innovation as they venture into e-commerce with their Cartier brand, while Net-a-Porter will be able to tap into the emerging luxury market in Asia via Richemont's commercial presence in the region.

ELuxury.com Shuts Down To Reinvent Itself

The retail industry was blind-sided last Friday when LVMH announced that it would be closing it's high-end retail commerce website, eLuxury.com in the next six months.

Unlike other retail closings, this one has nothing to do with financial performance. In fact, eLuxury.com has had double-digit sales growth from 2007 to 2008. A spokeswoman for LVMH told WWD.com that the decision to shut down eLuxury was because "many of the brands it sells have developed their own online presences".

However, eLuxury.com will still exisit, just in a different form. WWD.com reports:

“Starting in mid 2009, eLuxury’s new mission will be to create an ‘e-window’ into the world of luxury, by serving as an information reference for luxury in fashion, art de vivre, leather goods, wines and spirits, watches and jewelry, gastronomy, cars, yachts and services,” the spokeswoman said. “To that end, eLuxury intends to develop collaborations with the most prestigious names in the world of luxury media, as well as the main contributors of the luxury world.”

Can an e-magazine that's backed by one of the world's largest luxury congolmerates truly serve as a "reference for luxury in fashion"? In its current state, as a retail site, while eLuxury.com offers non-LVMH brands in its lineup, it's the LVMH brands that get the best product placement on their site, and in their email promotions. Will that carry over into the new venture, or will the new eLuxury give its readers bipartisan coverage of the luxury industry allowing PPR and Richemont, LVMH's biggest competitors, to receive positive exposure?