Vente-Privee, Farfetch and Others Represent Growing Danger to Yoox Net-A-Porter

Yoox Net-a-Porter

The problem with mergers is this: They paralyze the newly combined, supposedly stronger company for years. A merger means that two companies become one company that will be busy with figuring out its new self for some time.

Even more problematic is a merger that not just brings two different company cultures together but is also seen be one side as a hostile takeover – with the other side maybe even seeing it the same way?

All this of course rings true for Yoox Net-a-Porter that had a, shall we say, tumultous merger.

The problem here is even more severe as the online retail market itself is a tumultous growth market, making standing still especially costly.

Business of Fashion on the trouble with Yoox Net-a-Porter:

Luxury brands and consumers alike are rapidly embracing e-commerce and we see the luxury industry’s penetration of the online market doubling within the next five years.

This presents a big opportunity, but also a big challenge for the Yoox Net-a-Porter Group, the world’s largest luxury e-commerce platform following the merger of Yoox and Net-a-Porter in 2015. The company’s main banners may well have all bases covered, with Net-a-Porter serving the in-season, full price market and Yoox targeting the off-season side. But by now the big luxury brands have learned their lesson and are putting more and more resource and attention into developing their own online operations. At the same time, in such an attractive market, newcomers with new business models are bound to emerge. This is what we are seeing today. […]

[For Yoox] there is a risk that luxury brands decide to move away from the more visible online off-price channel and manage their own discounting. […]

But Net-a-Porter was established at a time when luxury goods brands knew little about online, were avoiding the channel and had little in the way of in-house capabilities. As a result, the early aggregators, of which Net-a-Porter was the pioneer, built a traditional wholesale business model that echoed traditional department stores, buying and pushing out merchandise to customers.

​Brands on one side, which have more business opportunities online now then they did a few years ago, new online fashion companies on the other side with different approaches trying to fill different needs:

New models are emerging that potentially fit better with the strategies of luxury brands.

One such model is operated by Farfetch. Unlike established aggregator peers, Farfetch is a platform player, aggregating the inventory of its boutique partners without holding any inventory itself. Instead, Farfetch’s algorithm directs orders to boutiques that hold the inventory and are linked to a local fulfilment network. An order placed by a customer is directed to a boutique based on proximity, cost of delivery and the boutique’s fulfilment record.

Farfetch, founded in 2008, has raised over $300 million in 6 rounds.

The Farfetch model is certainly working: the company is growing at 60 percent per year and looks to be on course to overtake Net-a-Porter as the largest online aggregator within 24 months. Meanwhile, in a changing market and against increasingly aggressive competitors, the Yoox Net-a-Porter group is ceding market share. Indeed, at a time when the company is having to manage its challenging merger, we fear Yoox Net-a-Porter risks being left behind by the industry’s changes.

​Even more than Farfetch, it is the other online fashion players that aren’t standing still and thus moving the online fashion market forward.

Two examples:

Zalando, which is slowly but surely building a portfolio of consumer facing brands/services to serve any need: From mobile marketplaces like Fleek and Movmnt to Zalon (personalized curation by stylists) and Zalando Lounge (shopping club) and, most likely in the not so distant future, as well a service aimed specifically at luxury fashion.

Vente-Privee, which is buying shopping clubs all over Europe:

The online fashion market in Europe has emerged the one of the fastest moving and growing e-commerce markets, surprisingly.

In that environment, when a year becomes an eternity, mergers, time and energy consuming as they are, don’t seem to be the best course of action.

More on this topic:


  1. […] Vente-Privee, Farfetch and Others Represent Growing Danger to Yoox Net-A-Porter […]


  2. […] unken schon, dass es damit zunehmend enger werden könnte für Yoox-und Net-a-Porter („Vente-Privee, Farfetch and Others Represent Growing Danger to […]


  3. […] Vente-Privee, Farfetch and Others Represent Growing Danger to Yoox Net-A-Porter […]


  4. […] Vente-Privee, Farfetch and Others Represent Growing Danger to Yoox Net-A-Porter […]


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: