PARIS (Reuters) - Kering said on Monday it would develop its own online shopping sites by 2020, ending an outsourcing joint-venture for brands like Balenciaga, showing how major luxury companies are speeding up e-commerce plans.
After a slow start shifting sales onto the web, wary that it would dilute their brands’ image, high-end fashion and jewelry labels are rapidly building up their own tech teams.
Kering said it would end a joint venture with Yoox Net-A-Porter (YNAP) dating back to 2013, depriving the online retailer, which also helps third party brands develop their sites, of one of its big name clients. The French company did not detail how much it would spend on developing its own on-line sites.
Kering brands will still sell clothing and other items through platforms like Net-A-Porter.
But YNAP, which Richemont took control of earlier this year, had set up and managed e-commerce operations for seven Kering brands, including Alexander McQueen and Bottega Veneta, with the notable exception of Gucci which the French luxury group set up itself.
Kering’s decision to take more online activities in-house shows how industry players with financial muscle are deciding to build their own digital operations, giving them full access to information such as client data.
Kering’s larger rival LVMH, owner of Louis Vuitton, last year launched its own multi-brand website known as 24 Sevres and has developed websites for its labels in-house.
The Kering/YNAP joint venture included an option for the French group to buy, and for YNAP to sell its stake after seven years. This meant a break-up was always a possibility, but the Richemont takeover has called into question whether more brands might exit their YNAP partnerships.
“We believe that an increasing number of luxury brands may also end their flagship partnerships with YNAP,” analysts at Berenberg said in a note.
For now, YNAP will still manage online stores for over 20 clients, from Italy’s independent Armani to puffer jacket maker Moncler, in a business that made up 10 percent of its 2.1 billion euros ($2.39 billion) revenues in 2017.
“This is a natural evolution for a large group with the scale of Kering,” YNAP said in emailed comments, adding that its e-commerce management business continues to thrive and included new services like designing mobile phone apps.
Richemont, also the owner of Cartier, declined to comment.
Brands are still exploring partnerships with third parties in specific areas or regions. Kering also said on Monday it was working with Apple Inc. on applications for use by sales assistants to scan inventories.
Rivals like France’s Chanel and Britain’s Burberry have partnered with Farfetch on similar services.
Some Kering brands also work with JD.com and Alibaba in China.
Kering’s online sales made up 6 percent of its 6.4 billion euro turnover in the first half of 2018, and grew by 80 percent in the third quarter, faster than revenue growth in department stores or its own shops. ($1 = 0.8797 euros)
Reporting by Sarah White, Pascale Denis and Sudip Kar-Gupta, editing by Louise Heavens and Jane Merriman
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