ZURICH (Reuters) -Luxury goods group Richemont said on Friday it was in advanced talks with Farfetch as it seeks to turn its loss-making Yoox-Net-a-Porter (YNAP) business into a neutral, industry platform, a proposal that should likely please critical investors.
Richemont said the current discussions included Farfetch investing directly in YNAP as a minority shareholder, with other investors to be invited to participate alongside, in view of creating a neutral, industry-wide platform, the Cartier maker said in a statement.
The move should appease activist investors that have reportedly entered the group’s capital. Long-time shareholder Artisan Partners spoke out publicly this week to criticise YNAP’s weak performance.
Richemont also reported a jump in net profit to 1.249 billion euros ($1.43 billion) in the first half of its fiscal year 2021/2022, beating a forecast for 1.151 billion euros in a Refinitiv poll, but remained cautious for the coming months.
“For the second half of the year, volatility is likely to persist, including in terms of inflation and geopolitical tensions. The Group will also face challenging comparatives,” the group also known for IWC watches said in a statement.
Richemont said sales rose 65% at constant currencies, helped by a very weak comparison base. On a reported basis, they were up 63% to 8.907 billion euros, also ahead of a forecast for 8.536 billion euros.
French luxury goods group LVMH said last month like-for-like sales rose 20% in the third quarter, while Kering reported a 12.2% increase. Both flagged a slowdown in Asia due to a resurgence of COVID-19 cases.
($1 = 0.8740 euros)
(Reporting by Silke KoltrowitzEditing by Riham Alkousaa and Paul Carrel)
