Yoox Net-A-Porter exits China – report

As luxury giant Richemont continues to seek a long-term solution for its underperforming Yoox Net-A-Porter (YNAP) business, a report has said that the online operation is exiting China to focus on more profitable markets.

The Financial Times said the luxury in-season and outlet YNAP group is closing its China operations, “highlighting its struggle to compete in a vast e-commerce market where high-end retailers face a weaker economic backdrop”.

Fashionnetwork.com has contacted Richemont for a comment on the story.

The move comes despite China being one of the world’s key luxury markets with massive growth potential and the country on which many luxe business have been focused in recent years.

The financial newspaper quoted a Richemont spokesperson saying YNAP will target its “investments and resources on its core and more profitable geographies”.

The company had operated in China under a joint venture with Alibaba, with a report saying the JV “will be liquidated”.

So why is the company finding it hard to generate profits from China? A number of luxury groups have highlighted a slowdown there with sluggish consumer demand, although some brands — such as Hermès — continue to prosper in the country.

YNAP has been in China since 2013 and entered the Alibaba deal in 2018 with a storefront launching on Alibaba’s giant Tmall platform the following year, so it has clearly given the market plenty of time to develop.

As for YNAP’s general future, after the deal for Farfetch to take on the business fell through last year, discussions about YNAP’s future are ongoing. Richemont has promised “to be in a position to disclose more before the end of the year”.