Online retailer Mytheresa among suitors for Yoox Net-a-Porter

Luxury online retailer Mytheresa is among potential bidders to buy lossmaking ecommerce business Yoox Net-a-Porter from Swiss luxury group Richemont.

According to people with knowledge of the sales process, which is being run by Goldman Sachs, private equity firms Bain Capital and Permira are also weighing up a bid for the business.

However the people said would-be bidders have expressed reservations about agreeing a deal because of ongoing losses at Yoox Net-a-Porter.

These losses are expected to continue in the coming years and make the business difficult to value.

“We are willing to look but it’s uncertain whether this makes sense [to buy],” said one of the potential suitors.

“It’s very much a turnaround type case,” said another. 

Mytheresa, a Germany-based luxury online retailer listed in New York, declined to comment on whether it was considering a bid for Yoox Net-a-Porter.

However it added: “Mytheresa is constantly evaluating opportunities to grow our business, which may include M&A activities from time to time.”

The search for a new owner for Yoox Net-a-Porter comes amid a reckoning over the viability of luxury ecommerce sites since the pandemic following an implosion of several rivals.

Yoox Net-a-Porter’s parent company Richemont has been looking for a new buyer for the business since a deal to sell a 47.5 per cent stake to rival ecommerce retailer Farfetch fell apart at the end of last year because of Farfetch’s own financial problems.

Yoox Net-a-Porter has been a problem for Richemont for years, with investors pressuring the Swiss group to offload it. Richemont has so far booked €1.8bn in non-cash writedowns on the business and the division made a loss of €128mn in the first half of Richemont’s current financial year.

Permira is looking at a potential transaction through its portfolio company BestSecret, a retail club based in Germany, according to people familiar with the matter.

Richemont, Permira, Bain and Goldman declined to comment.

Richemont, which also owns jeweller Cartier and fashion house Chloé, bought Net-a-Porter in 2010 before merging it with Yoox five years later in a fraught deal that led to the departure of Net-a-Porter founder Natalie Massenet.

A troubled technology and logistics overhaul then dragged on for years, costing hundreds of millions of euros.

Luxury ecommerce retailers flourished during the easy money era, when interest rates were at record lows following the financial crisis, as they benefited from luxury brands being slow to embrace selling online.

Pandemic-era savings also helped fuel a boom in online luxury sales. However the cost of running the sites soared just as the brands began cutting back on wholesale and took back control of their online sales. Slow progress towards profitability for most of these businesses also dimmed investor enthusiasm.