Farfetch, Richemont announce EU approval of YNAP deal

European authorities have given the green light for online luxury retailer Farfetch to purchase a stake in rival Yoox Net-A-Porter from Richemont, the Cartier owner said on Monday,

The final regulatory authority required to clear the deal, the European Commission unconditionally cleared the acquisition of a 47.5% stake in exchange for Farfetch Class A ordinary shares to Richemont, it said in a statement.

Completion of the deal remains subject to “certain other conditions that Richemont and Farfetch are working towards fulfilling,” Richemont said, promising a further update “in due course”.

Under the terms of deal unveiled in August 2022, Richemont would sell a stake of 47.5% in loss-making YNAP in exchange for more than 50 million Farfetch shares, and Farfetch could acquire the rest of YNAP through a put and call option arrangement.

But the deal was complicated by financial struggles at Farfetch, which has come under pressure as US retailers slash orders and more inventory comes from brands rather than wholesale clients, limiting its ability to draw in shoppers with promotions.

The US-listed company pioneered an innovative business model that persuaded many luxury brands to embrace online sales, but has yet to reach break-even because of high technology and marketing costs.