Italian online fashion retailer Yoox Net-A-Porter Group (YNAP) and Dubai-based billionaire Mohamed Alabbar announced a joint venture worth 130 million euro ($139 million) in luxury retail business in the Middle East.
YNAP said it will hold 60 percent of the joint venture while Symphony Investments, an entity controlled by Alabbar, will own the rest.
Alabbar bought into a 100 million euro capital increase by YNAP through his Alabbar Enterprises, which runs franchise operations in the Middle East and Asia, last year, taking a 4 percent stake in the Italian company.
The new YNAP venture will initially operate in the six Gulf Cooperation Council states, but may expand to others in the Middle East and North Africa. It will operate from a Dubai office and distribution center and open by the end of 2017.
The business will manage all of YNAP’s existing multi-brand online stores in the region, including Net-a-Porter, Mr Porter, Yoox and The Outnet, YNAP said.
Alabbar told Reuters that the enterprise value of the joint venture would be 130 million euros, with Alabbar putting in an undisclosed amount and YNAP not injecting any cash.
The Dubai businessman is chairman of Emaar Properties, the Dubai government-linked builder of the world’s tallest skyscraper. Emaar’s subsidiary Emaar Malls owns and operates Dubai Mall, which accounts for 50 percent of the emirate’s luxury goods spending.
The Gulf’s plethora of malls are overflowing with luxury-brand shops as global brands such as Tom Ford and Gucci have sought to capture rising appetite in the region for goods ranging from watches to home decor.
More recently, Alabbar has been seeking to expand his presence in technology, including online retail. He was behind the investment firms which in July bought out founder Fadi Ghandour’s stake in Dubai-listed logistics firm Aramex.
An industry source said at the time that the Aramex stake was part of a strategy to build an e-commerce platform for the Arab world. He also teamed up with Saudi Arabia’s Public Investment Fund (PIF) and other investors to launch Noon.com, which aims to be an e-commerce payments and logistics platform.