Both companies are regarded as leaders in e-tail for luxury clothing, accessories and beauty products.
Federico Marchetti, founder and CEO of Yoox Group, previously told Style.com that Net-a-Porter is his company’s greatest competitor.
He even compared the rivalry to Pepsi and Coca-Cola.
But the companies have decided to join forces to form a luxury goods powerhouse.
The two companies net revenues in 2014 combine to make €1.3 billion ($NZ1.89 billion).
Its Yoox website sells overstocked or unsold designer goods that didn’t sell in previous seasons.
The company bought Net-a-Porter outright from French luxury group Richemont.
Richemont will retain a 50 percent stake in the combined company, which will be called Yoox Net-a-Porter Group once Yoox shareholders approve the deal in June.
Natalie Massenet, founder and executive chairman of Net-a-Porter group and former fashion journalist, will be executive chairman.
Natalie Massenet. Source: The Zoe Report
Marchetti will be CEO of the merged company.
The merger means the company covers 180 countries and has 5.8 million annual orders combined.
The company is also expected to launch a capital increase of up to €200 million ($NZ290 million) to fund its future growth opportunities.
Chairman of Richemont, Johann Rupert, says the merger is to protect what’s rare about the luxury industry.
“Established business models are being increasingly disrupted by the technological giants,” Rupert says.
“It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry.”
“The merger of the two leaders will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands.”
Massanet echoes these grand ambitions and says the merged store will redefine the fashion media and retail landscape.
“It is a store that never closes, a store without geographical borders, a store that connects with, inspires, serves and offers millions of style-conscious global consumers access to the finest designer labels in fashion,” she says.
Yoox is well known for its partnerships with luxury brands, while Net-a-Porter is known for its branded content.
Massanet’s journalist background has assisted in creating Net-a-Porter’s branded content, including online magazine named ‘Porter’ that features style tips, products and interviews.
Verdict Retail’s lead analyst in clothing and footwear, Honor Westnedge, says the merger will be a game changer for online shopping through shared resources and expertise.
Verdict estimates the companies combined have a 7 percent share of the global online luxury goods market and a 33.3 percent share of the online luxury pureplays market.