Farfetch and Richemont announce EU approval of their YNAP deal

European authorities have given the green light for Farfetch to acquire Richemont’s stake in rival Yoox Net-A-Porter, Cartier’s owner said on Monday.

The final regulatory body needed to approve the deal has unconditionally approved the acquisition of a 47.5% stake in exchange for Class A common shares in Farfetch from Richemont, the European Commission said in a statement.

Richemont said completion of the deal remains subject to “other conditions that Richemont and Farfetch seek to meet,” and promised an additional update “in due course.”

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

But the deal was complicated by financial difficulties at Farfetch, which has come under pressure as US retailers cut orders sharply and more inventory comes from brands rather than wholesale customers, limiting its ability to attract customers and buyers with offers.

The company, listed on the US stock exchange, pioneered an innovative business model that convinced many luxury brands to adopt online sales, but it has not yet reached the threshold of profitability due to high technological and marketing costs.