Richemont gets more leverage in YNAP deal

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Shoppers are seen in front of a store of luxury goods, group Richemont's flagship brand, Cartier, amid the spread of the coronavirus disease (COVID-19), in Zurich, Switzerland December 11, 2021.

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MILAN, Jan 19 (Reuters Breakingviews) - Cartier owner Richemont had a great Christmas. Its total sales rose to 5.7 billion euros in the quarter to the end of December, up about 36% from before the Covid-19 pandemic exploded, lifting its shares 8%. Booming demand for high-end bracelets and watches explains most of the increase. Yet Richemont’s hard-pressed digital platforms division, which includes its Yoox Net-A-Porter (YNAP) online arm, also did well. Sales at the unit rose 18% from a year earlier to 785 million euros, almost twice as fast as the 11% rise in the previous quarter. Revenue was some 17% higher than in the quarter ending December 2019, before Covid-19.

Richemont did not disclose profit numbers, making it difficult to guess whether YNAP is now in the black. Yet the division’s faster growth may give Richemont more leverage as it prepares to sell a majority of YNAP to U.S. luxury marketplace Farfetch (FTCH.N) and other potential buyers. Its main suitor said in November that transaction volumes on its platform would grow more slowly than anticipated in 2021. The more Farfetch needs a deal, the better for Richemont. (By Lisa Jucca)

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Editing by Neil Unmack and Oliver Taslic

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