Luxury brands have been historically slow to embrace e-commerce. But in recent years, high-end retail sites like Net-a-Porter and Yoox and discount luxury flash sales like those on Gilt Groupe and Rue La La are forcing execs to rethink the benefits of online sales.
Bain & Co. estimates that the $4.9 billion online luxury market grew by 20% last year.
Richemont, which owns luxury names like Cartier, Van Cleef & Arpels, Montblanc, and Jaeger-LeCoultre—and has a 33% stake in Net-a-Porter—announced its offer today to buy the remaining 66% of the company, with founder Natalie Massenet remaining as the executive chairman. Richemont made the offer valuing Net-a-Porter at $534 million.
With the acquisition of a successful luxury e-tailer—Net-a-Porter saw sales of $183 million last year—Richemont is clearly making a commitment to boosting its presence in the online luxury space. Just last month, Cartier launched its U.S. transactional site.
At the time, Cartier North America CEO Emmanuel Perrin acknowledged the importance of selling on the web to WWD, "The Internet has been a medium taking an increasing part in our client's lifestyle and means of interaction."
Being available online is no longer a stigma to luxury brands, and things like holograms allow them to help consumers identify authorized resellers online. High-end designers like Narcisco Rodriguez and Norma Kamali have even created exclusive collections for EBay.
Massenet said in a press release, "Richemont has completely embraced our vision and strategy since they came on board as a shareholder and together we are going to continue to build the 21st century model for luxury fashion retailing."
Which would be e-commerce.
Now the question is whether the labels carried by Net-a-Porter will mind that the site is owned by a competing luxury house.