Richemont Spent €5 Billion to Learn It Bought the Wrong Business in 2018

In April 2025, Richemont — the owner of Cartier, the most disciplined hard-luxury group in the world — finally got rid of Yoox Net-a-Porter. It did not sell it. It handed the company over with €555 million of cash still inside it and no debt attached, and in exchange received shares in the buyer.⁶ Read that again. To exit its online-luxury business, Richemont stuffed it with half a billion euros and paid someone to take it. That is not a divestiture. That is what the end of a strategic error looks like when it has finally run out of road.

The official story is that Richemont bet boldly on digital luxury, and execution let it down. A great group tried to win online and stumbled. The truer story is colder: Richemont bought a business model that could never sit inside its own, and the seven years that followed were not a failed turnaround — they were the slow, audited confirmation that the bet was wrong the day the cheque cleared.

A boutique group bought a warehouse

Richemont's genius is scarcity. Cartier doesn't discount. It sells through its own boutiques, controls its inventory tightly, and makes its money on the gap between a small object and an enormous meaning. YNAP was the opposite animal: a multi-brand, inventory-heavy online distributor that bought stock from many houses, held it on its balance sheet, and competed partly on assortment and convenience. The two businesses don't just differ in channel — they differ in what an asset is. For Cartier, inventory is restraint. For Net-a-Porter, inventory is the business, and the business carried the markdown risk that hard luxury exists to avoid. Folding one into the other was never a digital upgrade. It was importing a fundamentally incompatible economic model and hoping the logo would do the rest.

It was also not an impulse. Richemont had been an investor in Net-a-Porter since the early 2000s, took a majority in 2010 in a deal that valued the business at around $533 million, and emerged from the 2015 Yoox merger holding roughly 49% of YNAP — but only 25% of the votes.⁷ The 2018 move everyone calls 'the acquisition' was really the buyout of the remaining half to reach full control, a culmination of fifteen years rather than a single bold leap.¹ The price the tender implied was the tell: it valued the whole of YNAP at €5.3 billion, with Richemont paying roughly €2.8 billion for the shares it didn't already own, at a premium of about a quarter to the market price.¹² A scarcity company paid a premium for a volume company. The arithmetic of the next seven years was set right there.

What the write-downs were actually confessing

The numbers do not read like a business being managed. They read like a value being walked down to zero in installments. In the year to March 2023, Richemont booked a €3.4 billion non-cash charge moving YNAP's net assets to 'held for sale' — a charge so large it crushed group profit to €301 million in a year of record operating performance everywhere else.³ The following year added a €1.5 billion loss from discontinued operations.⁴ The year after that, another roughly €1.0 billion loss, including a €954 million write-down of the net assets it was still trying to offload.⁵ Stack them and the cumulative non-cash damage exceeds €5 billion — more than the enterprise value Richemont assigned the whole thing in 2018. The accounting wasn't reporting a downturn. It was admitting the asset was worth a fraction of what it cost, and saying so a billion at a time.

The final line of that table is the loudest. When Richemont reported the year to March 2026, profit rose 27% to €3.484 billion — and the company itself attributed the jump partly to 'the non-recurrence of the €1.0 billion YNAP write-down.'¹⁰ A business that adds nearly three-quarters of a billion euros to profit the instant a unit disappears was not being held back by execution. It was being bled by ownership.

The escape hatch that collapsed

By 2022 the strategy had quietly inverted: the goal was no longer to win with YNAP but to get out of it. The first exit was elegant on paper. In August 2022 Richemont agreed to sell a 47.5% stake to Farfetch and a smaller slice to a Mohamed Alabbar vehicle, taking around 11% of Farfetch in return — a way to turn an owned problem into a minority position in someone else's platform.⁸ It is also exactly the kind of deal pressure produces: that July, activist Bluebell Capital had opened a campaign demanding Richemont refocus on hard luxury and deconsolidate YNAP outright.⁹ But the escape hatch had a floor made of Farfetch's own balance sheet. In December 2023 the agreements were terminated after Coupang acquired a collapsing Farfetch, and the proposed solution detonated along with it — triggering a €2.7 billion write-down and sending Richemont back to find another buyer.⁸ The fix had failed, and the only remaining buyer would take YNAP solely if it came pre-loaded with cash.

Wasn't this just bad luck — Farfetch, a soft cycle, a tough market?

The honest objection is that timing was cruel. Farfetch's implosion was not Richemont's doing, the online-luxury market cooled hard after 2021, and Net-a-Porter was once a genuinely admired pioneer Richemont nurtured for fifteen years. All true. But luck is the explanation you reach for when the underlying bet was sound, and here it wasn't. Notice that the Farfetch deal failed and the Mytheresa deal 'succeeded' in exactly the same direction: every available exit required Richemont to give value away, not collect it. When a single counterparty disaster makes a strong asset hard to sell, that's misfortune. When every path out costs you billions and the buyer wants the asset only with cash stapled to it, the asset was the problem, not the route. Even the governance favored decisive exit if it had been a near-miss worth saving — Johann Rupert's B shares give him 50% of the votes on 9.1% of the capital, and shareholders backed management over the activist by 83.97% to 9.50%.⁹ A founder-controller free to act, who chose to keep marking the asset down and finally pay to be rid of it, was not the victim of bad timing. He was settling a structural error.

Richemont's online-luxury chapter ends not with a sale but with a subtraction. It transferred YNAP, fattened with €555 million of cash, in return for a third of the buyer's stock — and watched its own profits leap the moment the asset was off the books.⁶¹⁰ The instructive part isn't that the company failed to win online. It's that the loss was legible from the start to anyone who asked whether scarcity and surplus inventory could ever share a balance sheet. Richemont spent more than €5 billion and seven annual reports to prove a thing it could have priced in 2018: you cannot bolt a volume business onto a scarcity business and call it digital. The two run on opposite math — and the math always wins.