In March, luxury conglomerate Richemont announced that its e-commerce subsidiary, Net-a-Porter, would be spun off as a separate company in a merger with competing e-commerce site Yoox. Now that the company's financial results for the year ending March 31 are out, we know just how well the site was performing ahead of the merger.
Though Net-a-Porter is seen as the undisputed leader in the fashion e-commerce landscape, the company has lost tens of millions of dollars in recent years. In the 2012/2013 fiscal year, it lost £27 million ($41.9 million), and in the 2013/2014 fiscal year, £12 million ($18.6 million). In the last fiscal year, however, Net-a-Porter almost broke even, reporting a loss of £2 million (about $3.1 million), with sales up 30 percent year-over-year.
Richemont also owns a number of luxury watch and jewelry brands — which together make up 82 percent of its sales — including Cartier, Van Cleef & Arpels and Mont Blanc, as well as Chloé, its only women's fashion business. Overall, sales at the group increased by 4 percent, led by growth in jewelry and watches. Though it represents a very small part of Richemont's overall business, the company said Chloé has shown "strong growth" in ready-to-wear and a "gradual turnaround" in its leather business thank to success of the Drew bag.
Profits, however, decreased by 35 percent. Richemont blames this on short-term investments, flailing sales in Hong Kong and Macau, and efforts to deal with foreign exchange rate fluctuations.