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Introduction

In March 2015, Milan-based online luxury fashion retailer YOOX Group (YOOX) and its London-based counterpart Net-a Porter Group (NAP) announced that they had agreed an all share merger of relative equals. This became effective in October of the same year and created the internet's largest specialist luxury goods retailer.

Features and benefits

* Learn about the rationale for the merger of these two leading luxury goods e-retail brands.
* Understand what YOOX, Net-a-Porter and the newly combined entity are and how they operate.
* Assess the pros and cons of the all-share merger.

Highlights

The merger was born out of the belief that the two can compete more effectively as one thanks to greater scale. Furthermore, the two businesses had different strengths and levels of concentration, and their coming together has created a more balanced business with a reduced dependency on any particular geographical region or area of operation.
There are a number of potential pitfalls that must be avoided if the merger is to be a great success. YNAP retains a narrow focus, and margins are low compared to industry standards. Richemont's involvement could be problematic as YOOX works closely with one of its main rivals, Kering, to generate a valuable revenue stream.
NAP and YOOX have distinct brand images and values that users/shoppers are familiar with and there is potential for these to be eroded, with YOOX's greater focus on off-season fashion a particular risk in this regard.

Your key questions answered

* What is Yoox?
* What is Net-a-Porter?
* Why did the two choose to merge?
* What are the potential future issues facing the newly-formed combined entity YOOX Net-a-Porter Group?

Table Of Contents

Yoox Net-a-Porter Group: Merger creates online luxury retail super brand
OVERVIEW
Catalyst
Summary
A MERGER OF RELATIVE EQUALS
YOOX: High end multi-brand fashion brings profitable growth
More than just Yoox.com
YOOX has significant worldwide presence
YOOX also operates a mono-brand e-commerce business
Net-a-Porter: Prime name in high-end fashion, mixed profits
Richemont acquired NAP
Financial performance has been mixed
Merger of two market leaders
SYNERGISTIC MERGER, MORE BALANCED MODEL
All-share merger creates 'YNAP'
Significant synergies expected
Merger brings together complementary skills
Reduced reliance on any one market or segment
More (potential) customers
LOW MARGIN, NARROW FOCUS, POTENTIAL CLASH
Focus on high end fashion but low margin
Net-a-Porter risks brand dilution
Richemont's involvement creates potential conflict of interest
CONCLUSIONS
YOOX Net-a-Porter Group to become a major luxury fashion power, but pitfalls must be carefully avoided
APPENDIX
Definitions
Sources
Further Reading
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