Retailers have long been frenemies to luxury fashion brands, working together to sell products while also competing for consumer spend. However, Kering just took a more aggressive stance by ending its partnership with Yoox Net-a-Porter. While Kering brands will still distribute on e-tailers, the company is working to expand control by bringing e-commerce in-house.
Since Kering and Yoox Net-a-Porter first joined forces in 2012, YNAP has managed online sales for many Kering brands. However, the conglomerate now seems to think it’d be better off alone, following the acquisition of YNAP by rival conglomerate Richemont earlier this year.
Kering brands featured on Net-A-Porter’s site the day that the news was released included Alexander McQueen, Balenciaga, Bottega Veneta, Saint Laurent, and Gucci, the leading brand in Gartner L2’s Digital IQ Index: Fashion Global. It’s expected that Kering and YNAP won’t completely part ways until 2020.
E-commerce continues to be a growth engine for fashion brands, and the budgets of leading labels continue to prioritize digital investments. Increasingly, that means shifting away from wholesale channels and turning toward monobrand stores and direct-to-consumer e-commerce. However, this is still an uphill battle for brands, as online shoppers have little incentive to shop through brand properties instead of retailers.
Kering, however, is hoping exclusivity on brand sites might be enough to incentivize shoppers. Compared with rivals Richemont and LVMH, Kering is already seeing an increasing percentage of annual revenue coming from direct channels.
The news follows Kering’s announcement of a strategic deal with Apple to create a suite of in-store apps for its brands. Clearly, Kering is proving that it’s forward-focused by prioritizing its direct-to-consumer channels. But we’ll have to wait until next year to see how these investments play out.