Yoox Net-A-Porter leaves China – report

As luxury giant Richemont continues to seek a long-term solution for its unprofitable Yoox Net-A-Porter (YNAP) business, the report shows that its online business is leaving China and focusing on more profitable markets.

The Financial Times. said seasonal and luxury outlet group YNAP was closing its operations in China, “underscoring its struggles to compete in the vast e-commerce market where high-end retailers are struggling with a weaker economy.”

Fashionnetwork.com has reached out to Richemont for comment on this story.

The move comes despite China being one of the world’s key luxury markets with enormous growth potential and a country that has been the focus of many luxury companies in recent years.

The financial newspaper quoted a Richemont spokesman as saying YNAP would focus its “investments and resources on its core and more profitable geographic locations.”

The company operated in China as part of a joint venture with Alibaba, and the report said the JV “will be liquidated.”

So why is it difficult for the company to generate profits from China? Many luxury groups have pointed to a slowdown in the country amid weak consumer demand, although some brands – such as Hermès – continue to thrive in the country.

YNAP has been operating in China since 2013 and signed a deal with Alibaba in 2018, and the following year launched a storefront on Alibaba’s giant Tmall platform, clearly giving the market plenty of time to grow.

As for YNAP’s overall future, discussions are ongoing about YNAP’s future after Farfetch’s acquisition deal fell through last year. Richemont promised it would “be able to reveal more before the end of the year.”