Photo credit: Net-a-porter
Net-a-porter could be valued between USD 2.7 billion and USD 3.38 billion should rumours of an IPO bear fruit.
Equity research firm, Vontobel, made the revelation when comparing the e-tailer to German clothing firm Zalando, which will hit the market later in the year.
Compagnie Financière Richemont – the parent company of Net-a-porter – has so far denied that the online fashion retailer is for sale. However, according to Vontobel’s predictions, an IPO could be worth 6 to 7 per cent of Richemont’s market capitalisation – based on a valuation of 4.3 times Net’s 2012 sales.
Despite essentially being a loss-making company, Vontobel says that Net-a-porter still generates a positive cash flow.
Vontobel said: “Zalando’s IPO will be an interesting comparison to Richemont’s luxury online retailer Net-a-porter, which is still loss making but mainly due to the intangible write-offs and the expansion into the Asian markets.
“Already in October Richemont stated that Net-a-porter is not for sale, and we do not expect an IPO in the short term, but it will continue to outperform in terms of growth and we expect a positive contribution in [the 2015 fiscal year]. We continue to recommend the stock as a buy”.
It’s not just Vontobel who see the potential. Last October, Thomas Chauvet, head of European luxury goods research at Citigroup, said he believed Net could be sold for EUR 2.28 billion, or USD 3.08 billion. That’s three times Net-a-porter’s projected sales for the 2014-15 fiscal year, according to Citi estimates.