Net-a-Porter Begins New Chapter With Richemont

LONDON — The fast-growing online sector is becoming a hot spot for mergers-and-acquisitions activity.

Compagnie Financiere Richemont SA took a giant step into the e-commerce arena Thursday with the purchase of Net-a-Porter.com, the online fashion retailer it has valued at 350 million pounds, or $532 million.

Natalie Massenet, the founder and chairman of Net-a-porter, will remain at the company, and is looking at an estimated windfall from the sale of 50 million pounds, or $76 million. A Net-a-Porter spokesman, however, declined to confirm that figure.

Johann Rupert, Richemont’s executive chairman and CEO, lauded Massenet for creating a “superb, customer-oriented business in a relatively short period of time” and promised to provide the company with “the support it requires to realize its business strategies.”

Massenet said in a telephone interview Thursday that she was “tremendously excited and proud” to have given her shareholders and backers “this wonderful exit.” She said day-to-day operations at the site would continue as usual. “Nothing is changing. We’re here to stay, and there’s no intention to slow down the momentum.”

Richemont, which already held a 33 percent stake in Net-a-Porter and preemptive rights to purchase the remaining shares, said in a statement Thursday the site would be managed as an independent entity, just like Richemont’s other brands, which include Cartier, Van Cleef & Arpels and Dunhill.

Net-a-Porter’s business has grown steadily since Massenet founded the retailer in 2000, and sales were roughly 120 million pounds, or $182 million, in the year ending Jan. 31, 2010.

Luca Solca, senior research analyst at Sanford Bernstein, said it is “a bold move” for Richemont to buy the multibrand e-tailer. “The risk here is that other brands will be underwhelmed to see that their online customer is now owned by a competitor,” he told Footwear News.

Gail Zauder, founder of Elixer Advisors, a boutique investment firm, said she is confused as to how Net-a-Porter fits into Richemont’s strategy.

“It’s very smart that they own it. [Net-a-Porter] is only going to grow,” she said. “[However], it doesn’t seem to fit with Richemont’s strategy from a pure business standpoint. Through conversations with them, their interest was not in apparel as much as in other stuff. It’s sort of bizarre. But on the other hand, sitting there, it would have been stupid to let someone else [buy Net-a-Porter].”

And while Zauder lauded Net-a-Porter’s business model, she noted that the Website is “not a vehicle to get Richemont’s products out there.”

Asked whether she expected Richemont to use the site to sell its own brands, Massenet said, “No discussions have taken place. We’re not talking about that, but we won’t rule out anything in the luxury space.”

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