Emaar chief Alabbar buys stake in fashion retailer YNAP

Mohamed Alabbar is 'building a relationship' with YNAP.

Dubai entrepreneur Mohammed Alabbar will take a four per cent stake in online fashion retailer Yoox Net-A-Porter, or YNAP, in a move expected to push the Italian group's growth in the high-potential Middle Eastern market.
YNAP, which was created last year from the merger of Italy's Yoox with upmarket rival Net-a-Porter, said Alabbar would buy into a ?100 million ($113 million) reserved capital increase through his Alabbar Enterprises company.
The Dubai group runs various franchise operations in the Middle East and Asia, including chocolate maker Hershey's and fashion house Oscar de la Renta.
Alabbar is also chairman of Emaar Properties, the builder of the world's tallest building and whose subsidiary Emaar Malls owns and operates Dubai Mall, which accounts for 50 per cent of the emirate's luxury goods spending. "Mr Alabbar's track record in delivering exclusive luxury and retail experiences across the Middle East will provide us with invaluable insights in the fast-growing regional luxury fashion market," YNAP chief executive Federico Marchetti said. The region accounts for a five per cent share in global luxury consumption and is seeing growing internet sales due to increasing public investments in e-services and telecoms infrastructure, YNAP said.
Alabbar told Reuters YNAP had a strong management and referred to the company's double-digit growth as the reason for his investment. He declined to comment on whether he could take a larger shareholding in YNAP. "We are building a relationship with this company, its shareholders and management, and I wouldn't mind getting involved," he said.
YNAP owns six multi-brand shopping websites, including Net-A-Porter.com. In March it forecast slightly slower revenue growth for 2016 after strong sales helped it post a 26 per cent rise in pro-forma core profit last year.
New shares sold in the capital increase reserved for Alabbar have been priced at ?28 per share, a premium of 5.7 per cent to YNAP's closing price on April 18.
YNAP shares rose more than four per cent to ?27.58 by 0930GMT.
"The deal is not dilutive for shareholders and it provides additional cash to fund the ?95 million integration costs planned within the Net-a-Porter acquisition," said Marco Baccaglio, an analyst at Kepler Cheuvreux.
The size of the fund raising is below the ?200 million level that had been approved by YNAP's shareholders last year. The group said this was because its financial needs were lower than initially estimated.
"The luxury market worldwide is looking reasonably well, the Middle East is looking good overall - the demographics are healthy and I'm optimistic on the Middle East," Alabbar said.
Industry think-tank Euromonitor International says residents with a higher disposable income, along with tourist spending, will keep demand for luxury flowing in the UAE.