Richemont: Nobody’s too posh not to buy a watch online
Takeover of YOOX Net-a-Porter Group earlier this year has seen its online sales rise from €59m to €694m
Luxury goods groups such as Richemont, which owns the Cartier and Van Cleef & Arpels brands, used to be in a bind when it came to sales on the internet.
The groups feared that if they sold their snazzy watches, perfumes and jewellery online, their brands (or maisons as they are known in the industry) would be devalued.
The danger is real. In the world of luxury brands, being seen as “cheap” is fatal. On the other hand, if they didn’t sell online they would lose sales.
For about a decade luxury groups handled this dilemma by mostly ignoring e-commerce. It worked. They preserved their exclusivity and their customers happily went into their upmarket stores to buy something shiny and nice.
But then their customers’ behaviour changed – they actually wanted to buy luxury goods online.
Richemont has profited from this change. Its takeover of online retailer YOOX Net-a-Porter Group (YNAP) earlier this year has seen its online sales rise from €59m to €694m for the third quarter to end-December.
Its success in selling online seems sudden but for over a decade Richemont has been working quietly on it. It wisely let the Italians, who were the half owners of YNAP, run the show for a few years before it took full control of the group.
It’s doing a similar thing in its partnership with Chinese e-commerce giant Alibaba. While it expects a lot from its partnership, it wants to build it carefully.