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Richemont invites LVMH to join luxury retail website

Paris - Richemont [JSE:CFR] chairperson Johann Rupert invited LVMH Moet Hennessy Louis Vuitton and Gucci owner Kering to join in an attempt to build a luxury retail website that can compete with the world’s largest online vendors.

The South African billionaire, who controls the Swiss company and its 20 brands, said he has spoken to LVMH chairperson Bernard Arnault and Kering about them joining the Yoox Net-a-Porter platform. Luxury goods makers need more critical mass in e-commerce to survive against the competition, he said.

“We’re not big enough,” Rupert said in a speech at the Financial Times Business of Luxury Summit in Monaco on Monday. “What I said to them was they can come in and get equity in the company” if they commit their brands to sell via the platform.

Yoox and Net-a-Porter, which announced plans to merge in March, had combined annual sales of about €1.3bn in 2014. Amazon.com, which has departments devoted to luxury watches and jewelry, had $89bn in revenue last year.

Rupert said last month the level of Amazon’s capital expenditure is “staggering.”

The Geneva-based company, whose full name is Compagnie Financière Richemont, has said it aims to make Yoox Net-a- Porter the “dominant neutral platform for the luxury goods industry”.

Kering already has a joint venture with Yoox to manage ecommerce for most of its fashion and leather goods brands, except Gucci.

By combining with other brands, Yoox Net-a-Porter could offer a higher-end shopping experience compared with the largest online retailers, Richemont said last month. The online platform has said it plans to sell as much as €200m in stock to allow for the entry of new strategic investors after the merger is completed.

Internet retail is “really a big boys’ game”, Rupert said on the May 22 conference call. “It’s not for the faint of heart.”

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