Richemont teaming up to stay exclusive

Johann Rupert, chairman and controlling shareholder of Richemont, wants to team up with his rivals. What gives? And all this is not long after Richemont had injected their Net-a-Porter business in return for an equity stake in Yoox. They have equal equity for now, they do not have control of the business. The Bloomberg story is as follows: Richemont Invites LVMH to Join Website to Compete With Amazon. The plan is to actually use the Yoox Net-a-porter platform, by getting LVMH and Kering SA to have equity in the business, Yoox that is. Johann Rupert was talking at the FT Business of Luxury Summit in the picturesque town of Monaco.

Gucci is the only brand of Kering SA that is not selling on the platform yet, the company owns brands such as Alexander McQueen, Bottega Veneta, Stella McCartney and strangely Puma too, as well as Volcom and others. I am guessing that the reference to Amazon.com having the size and scale is something that Rupert sees as a threat to their collective businesses. He wants to maintain the quality, the reason why these companies do not cheapen their brands by mass producing affordable items, is to keep the allure.

I mean, if money was no object, would you object to a 4100 Dollar Babylone PM LVMH bag? It looks really nice as far as bags go, I have seen with my own eyes and heard how people will "sell their souls" for such items. If you are into shoes, then this one is for you guys, the Framework Richelieu, at a cool 1240 Dollars a pair. The Richemont brands are on the Net-a-porter website, you can get a Chloe Fedora leather shoulder bag for 2245 Dollars. Sorry, that one is actually sold out. Yes, sold out, meaning all of them have been bought.

The question is, would you buy a (the most expensive item) 70 thousand Dollar Olivia Collings 1840s silver, amethyst and diamond bracelet online? It is apparently one of a kind, with a certificate of authentication. I can see items that are not exactly out of reach of rich middle income people, more mainstream stuff being sold online. For your luxury item such as a Van Cleef & Arpels Palmyre necklace, 6 rows, described as "Six rows of round diamonds complement a graceful mounting in white gold for this elegant necklace" is marked on the online store at a cool 360 thousand Euros. That is a little over five million Rand. Is that with or without sales tax? Of course you would want to feel and try the item on before parting with that much money.

What this indicates to me, the move that Rupert is calling on his industry peers to sell on one platform (certified) is that he wants the exclusivity to remain exactly that. No cheapening of the brands, he knows the importance of that.