Yoox Net-a-Porter (YNAP) has entered into a joint venture with Symphony Investments – an arm of Mohamed Alabbar – to create an online luxury retail powerhouse in the Middle East.
Famous for founding the company that created the world's tallest building, Burj Khalifa, as well as the world's largest shopping mall in Dubai, the acclaimed retail mogul and property developer will gain access to YNAP's brands and technology platform in order to accelerate online growth in the region in the form of a new company.
This news comes eight months after Alabbar invested €100 million in YNAP.
The joint venture will manage all existing YNAP brand stores in the region, including, Net-a-Porter, Mr Porter, Yoox and The Outnet, which will launch over the next two years, as well as creating future online flagship brands for Middle Eastern shoppers. YNAP will hold a 60% stake in the joint venture, while Symphony Investments will own the remaining 40%.
"We are thrilled by the potential of the Middle East market: combining YNAP and Mohamed Alabbar’s strengths, we look forward to giving shoppers in the region access to a fantastic luxury assortment with our unparalleled service and content," said Federico Marchetti, CEO of YNAP. "We were delighted to welcome Mohamed Alabbar as a strategic investor earlier this year and together we are now embarking on a major expansion in the region.”
The new company will trade in the United Arab Emirates, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman, with a local office and distribution centre in Dubai by the end of 2017 to provide a localised offer to customers. The company may also expand into other Middle Eastern countries and North Africa in the future.
YNAP will appoint the majority of the corporation's board of directors, as well as a CEO and finance manager, while Symphony Investments will appoint the chairman.
Mohamed Alabbar, chairman of Symphony Investments, added: "The Middle East is one of the fastest growing global centres for luxury retail. The region also has a significant population of over 200 million young people who are tech-savvy and influence luxury retail decisions. With this joint venture to be based in Dubai, a global business & leisure hub, we are pioneering a never-before online luxury retail experience that integrates luxury with techno-logistics. It will redefine the retail sector, and create a brand-new way to access the world’s high-end brands brought by YNAP. A ground-breaking initiative, the JV will serve as go-to online destination for luxury retail and set new industry benchmarks in customer service, speed of delivery and diversity of choice."
Alabbar also recently partnered with a number of investors to launch a $1 billion eCommerce platform, called Noon.com, which aims to accelerate online growth in the Middle East. While online has struggled to take off in the region, the new platform will offer 20 million products, as well providing logistic and payments capabilities, such as cash on delivery to overcome eCommerce concerns.
Despite slow online growth in the Middle East, the location accounted for 3% of global luxury consumption in 2015, demonstrating an appetite for the market.
It has also been reported that Alabbar has been in discussions with Amazon founder Jeff Bezos, after the pair were spotted at the world-famous Dubai Mall together.