Yoox Net-A-Porter agrees to Middle East joint venture

Yoox Net-A-Porter has signed a joint venture with Dubai-based billionaire Mohamed Alabbar to create an online luxury retail business in the Middle East.

YNAP will hold a 60 percent stake in the joint venture while Symphony Investments, an entity controlled by Alabbar, will own the remaining 40 percent, YNAP said in a press statement, without revealing any financial details.

The joint venture will see the management of all Yoox Net-A-Porter group’s existing multi-brand online stores in the region, including Net-A-Porter, Mr Porter, Yoox and The Outnet, as well as an agreement with the brands, select existing and future online flagship stores “powered by Yoox Net-A-Porter group” that have significant business potential in the Middle East.

In addition, the agreement will see the establishment of a distribution centre in Dubai that will offer same-day delivery, while on-the-ground operations are to include a Dubai-based office with dedicated sales, marketing, PR and customer care teams that will provide Middle Eastern customers with a highly tailored offering.

These dedicated teams will be responsible for developing the localised offering including Arabic-language customer care and content, as well as local currency and payment methods.

The new company will operate in the Gulf Cooperation Council countries including the United Arab Emirates, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman, however, the press statement said that it “may expand to other countries in the Middle East and North Africa at a later date”.

Federico Marchetti, chief executive of Yoox-Net-A-Porter group, said: “We are thrilled by the potential of the Middle East market: combining YNAP and Mohamed Alabbar’s strengths, we look forward to giving shoppers in the region access to a fantastic luxury assortment with our unparalleled service and content. We were delighted to welcome Mohamed Alabbar as a strategic investor earlier this year and together we are now embarking on a major expansion in the region.”

YNAP places emphasis on Middle East with joint venture with Symphony Investments

This joint venture comes as research reveals that Middle East customers spend 2.5 times more per year on luxury on Yoox Net-A-Porter than average customers and that their order value is 50 percent higher than the global average. Further research by Bain and Company revealed that the Middle East region accounted for 3 percent of global luxury consumption in 2015 and that the region is expected to significantly outpace the growth of the global personal luxury goods market over the next five years.

The local office and distribution centre in Dubai will open by the end of 2017. Yoox and The Outnet will be the first to debut in 2018, while Net-A-Porter and Mr Porter will launch in 2019, followed by selected online flagship stores.

Mohamed Alabbar, chairman of Symphony Investments, added: “The Middle East is one of the fastest growing global centres for luxury retail. The region also has a significant population of over 200 million young people who are tech-savvy and influence luxury retail decisions.

“With this joint venture to be based in Dubai, a global business & leisure hub, we are pioneering a never-before online luxury retail experience that integrates luxury with techno-logistics. It will redefine the retail sector, and create a brand-new way to access the world’s high-end brands brought by YNAP. A ground-breaking initiative, the JV will serve as a go-to online destination for luxury retail and set new industry benchmarks in customer service, speed of delivery and diversity of choice.”

Alabbar’s relationship with YNAP began earlier this year when he invested 100 million euros in the online retailer.

Symphony Investments, along with its affiliates, operates and invests in businesses in the Middle East, Southeast Asia and Africa across a variety of sectors including luxury fashion, retail, e-commerce, mining, and real estate.

Image: courtesy of Yoox Net-A-Porter