Online retailers Net-A-Porter and Yoox are to merge, creating a combined business with revenues of more than €1.3bn.
Net-A-Porter's parent Richemont has agreed an all-share merger with Yoox, which also owns The Corner and Shoescribe, as well as several monobrand etailers. The agreement will need to be approved by Yoox shareholders at a meeting in June.
Net-A-Porter's founder and executive chairman Natalie Massenet will remain in that role for the group, while Yoox founder and chief executive Federico Marchetti will serve as chief executive of the merged business.
The combined business will be renamed Yoox Net-A-Porter Group. It will be incorporated in Italy, as Yoox currently is, and listed on Borsa Italia.
Richemont will receive 50 per cent of the share capital, but its voting rights will be limited to 25 per cent. It will appoint two representatives to the board.
Richemont has committed to a lock-up period of three years.
The group will launch a capital increase worth €200m as it looks to invest for future growth, in which Richemont is expected to participate.
Richemont chairman Johann Rupert said: “Established business models are being increasingly disrupted by the technological giants. It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry.
“The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands.”
Massenet, who is also chair of the British Fashion Council, said: “Today, we open the doors to the world’s biggest luxury fashion store.
“Together, with our world-class teams in technology, logistics, content and commerce we are redefining the fashion media and retail landscape. The best way to predict the future of fashion is to create it.”
Marchetti added: "Together, we plan to expand on our many combined successes and industry breadth to strengthen partnerships with the world's leading luxury brands and harness a significant untapped growth potential.”
The transaction, which will generate a one-off non-cash accounting gain for Richemont of €317m, is expected to complete in September 2015.