This represents a significant step in achieving Richemont’s vision of making YNAP a neutral industry-wide platform, and, through a put and call option mechanism (which is subject to certain conditions noted below), lays a path towards Farfetch potentially acquiring the remaining shares in YNAP, bringing together these highly complementary businesses, according to a press release. The partnership also marks a step change in Richemont Maisons’ omnichannel distribution capabilities.

Through this partnership, Richemont and YNAP will leverage Farfetch’s technology platform to advance their Luxury New Retail programme. YNAP will adopt Farfetch Platform Solutions to facilitate its shift towards a hybrid retail-marketplace model. Richemont will adopt Farfetch Platform Solutions to advance the delivery of the omnichannel strategy of its Maisons, which will also join the Farfetch Marketplace, boosting, among other categories, Farfetch’s watches and jewellery offering.

Upon completion of the sale of 47.5 per cent of YNAP’s share capital to Farfetch, Richemont will receive 53.0-58.5 million Farfetch Class A ordinary shares (expected to represent 10-11 per cent of the fully diluted share capital of Farfetch and 12-13 per cent of the issued share capital). Richemont will also receive $250 million (expected to be settled in Farfetch Class A ordinary shares, using the then current 60-day VWAP) on the fifth anniversary of completion of the initial stage of the transaction. At completion of the initial stage, YNAP will be free of financial debt, with a minimum of $2902 million of cash on its balance sheet, and Richemont will make available, for up to 10 years, a committed credit facility for an additional $450 million that YNAP may draw upon at its discretion, subject to certain conditions.

Alabbar, Richemont and YNAP’s longstanding partner in the Gulf States, will become a shareholder in YNAP, alongside Richemont and Farfetch. Alabbar will acquire a 3.2 per cent interest in YNAP in exchange for its shares in the joint venture with YNAP in the Gulf Cooperation Council region. As a result of this share swap, YNAP will own 100 per cent of its business in the region.

Completion of the second and final stage of the transaction, to the extent triggered, is subject to the receipt of certain regulatory approvals, added the release.

“YNAP is one of the most coveted global luxury shopping destinations and the partnership with Farfetch, by continuing to develop YNAP’s marketplace business, will further enhance the experience for its brand partners and discerning clientele. I am also confident that our deep understanding of the Middle Eastern luxury market, with its tech-savvy and influential customers, will be of great value to YNAP going forward,” said Mohamed Alabbar, founder and owner of Symphony Global.

Fibre2Fashion News Desk (NB)