By Carol Ryan

The final bill has arrived for Richemont's 14-year online shopping spree: $4.2 billion of write-downs.

Cartier's Swiss owner is offloading Yoox-Net-a-Porter to German rival Mytheresa.com. An earlier attempt to sell nearly half of the loss-making e-commerce business to Farfetch fell through, after the buyer ran into financial difficulty.

Getting the deal done now required generous terms. Mytheresa gets full ownership and a cash dowry equivalent to $609 million. Richemont also threw in a EUR100 million, or roughly $110 million, credit facility for six years, for general needs and working capital.

In return, Richemont gets a roughly one-third stake in Mytheresa, worth around $120 million at Friday's close, and a board seat. The holding means Richemont will share in any future upside. But Mytheresa has had a rocky time as a public company, with its stock down heavily since it went public nearly four years ago.

Overall, Richemont's shareholders will be relieved to see the back of YNAP. Many thought a hefty recapitalization would be needed to convince someone to take the business off Richemont's hands.

Selling luxury online has become brutal for third-party retailers. Rivals like matchesfashion.com have already gone to the wall. Including a EUR1.3 billion write-down announced Monday, Richemont has written off EUR3.8 billion for YNAP since first buying Net-a-Porter back in 2010, according to Thomas Chauvet, luxury analyst at Citi Research.

The Mytheresa deal draws a line under this painful episode for Richemont. But going offline has been costly.

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October 07, 2024 07:47 ET (11:47 GMT)

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