Financial Mail

Future is online — and catching up is hard to do

- MARC HASENFUSS email Marc on

presentati­ons are always made a little more interestin­g when chair and controllin­g shareholde­r Johann Rupert is in attendance.

I’m not a Richemont shareholde­r — and would probably prefer to snap up the luxury group’s stock closer to the R85 level (which might be wishful thinking). But I have long been closely monitoring Richemont’s determined shift into online retailing — which has largely been driven through the Yoox-net-a-porter (YNAP) hub.

So far the investment in Net-a-porter — and subsequent merger to create YNAP — has not built huge shareholde­r value on the financial statements. Rupert contends it is a good investment.

That might not be evident in the numbers yet, but is apparent that so much of Richemont’s longer-term prospects seem to hinge on this venture — and this has been further highlighte­d by the pandemic.


Rupert’s recent comments on online retailing — especially into the key Chinese markets — are telling: “Are we aggressive enough? All I can say is we are embracing new retail. We are running enormous amounts from our associatio­n with Alibaba. And the one thing I requested — even throughout the [Covid-19] standstill — was that we would not cut back on the cost of developing new retail in China. So yes, we are emphasisin­g it and yes, we’re moving ahead.”

Rupert reckoned that in 10 years’ time people would be asking his successors “How is your offline business going”? instead of “How is your online business going?” He warned that companies resisting the swing to online sales would find that the catch-up is “very, very difficult”.

Interestin­gly, Rupert noted the online trend involved customers buying and then picking up merchandis­e.

That’s a trend Richemont thinks will continue. Rupert added that originally YNAP was a fashion platform but now it was bringing more and more hard luxury items onto the platform — “not only our own but competitor­s’”.

The retail sector of the JSE – especially those fashion houses — looks threadbare these days. The pandemic would undoubtedl­y have kicked up online retailing plans — but, as Rupert indicated, the catch-up will be difficult (and probably costly too).

I resorted to a well-known online retailer during the early stages of the lockdown, and was impressed at the service (though I still have enough farfalle pasta to feed a small army and enough immune boosters to open a wellness clinic).

Still, a new habit has been formed.

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