Friday, April 2, 2010

What Richemont sees in Net-a-Porter

Swiss luxury goods maker Compagnie Financière Richemont SA on Thursday announced a deal to buy U.K.-based online luxury retailer Net-A-Porter Ltd., a transaction that signals the increasing importance high-end consumer goods companies are assigning to online sales.

Richemont, the owner of brands such as Cartier, Montblanc and Chloe, previously held a 33% stake in closely held Net-a-Porter, but agreed to acquire a majority of the company from a group of private shareholders for up to £225 million ($341 million). Richemont said the transaction values the overall company at £350 million.

What Net founder and chairman Natalie Massenet (mass-in-ay), 44, has done is combine on one website the thrill of shopping at a chic boutique with the pleasure of reading a fashion magazine. Net not only showcases and sells clothes but also publishes a weekly online glossy that decodes the latest trends.

And by mixing these two addictive leisure activities -- shopping and perusing a magazine -- into one designer drug, Net is doing for $2,000 Calvin Klein dresses what Amazon did for "The Da Vinci Code" and iTunes for Coldplay.

As a result the company is growing exponentially at a time when many purveyors of luxury goods are struggling.

The focal points of the office are two giant flat screens that track orders as they come in, a motivational tool that reminds everyone that this is all business. The top screen shows an image of the products and the price of each order as it is placed, along with a running tally of the day's sales figures. The bottom one depicts a map of the world that rotates to show the origination point of the latest order.

"Almaty Kazakhstan $806" moves across one monitor as the locator screen tracks over Europe and past the Caspian Sea before alighting on the business center of the former Soviet Republic. The locator map then shifts to "Hamburg, Germany," while on the adjacent screen a $350 organic cotton tee with that Peter Blake cloud print drifts by.

Direct Link