Italy’s online fashion giant Yoox has bought its rival Net-A-Porter in an all-share-deal, in a bid to become the leader in the global online luxury market.

The UK-based Net-A-Porter is a subsidiary of Switzerland’s Richemont while Yoox is a global retailing partner for leading brands, with multi-brand online stores yoox.com, thecorner.com and shoescribe.com, as well as with numerous mono-brand online stores. 

Yoox has more than two million high-spending customers and over 24 million monthly unique visitors worldwide. Its brands include Ermenegildo Zegna and Kering's Bottega Veneta and Saint Laurent. 

The two companies had combined revenues of €1.3 billion ($1.4 billion) in 2014.

The agreement is conditional upon the approval of Yoox shareholders and upon completion of the transaction, the new entity will be renamed Yoox Net-A-Porter, and will continue to be incorporated in Italy. 

Net-A-Porter Founder and Executive Chairman Natalie Massenet will serve as Executive Chairman and Yoox Founder and CEO Federico Marchetti will be CEO of the combined entity.

Richemont will receive 50 per cent of the share capital of the combined entity’s listed parent company. 

Yoox Net-A-Porter is expected to launch a capital increase of up to €200 million ($214 million) to fund future growth opportunities.

Richemont Chairman Johann Rupert said: “Richemont has been a pioneer in luxury e-commerce ... and we are proud of Net-A-Porter’s achievements. Established business models are being increasingly disrupted by the technological giants. 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 will further enhance an independent, neutral platform for a sophisticated clientele looking for luxury brands.”

The transaction is expected to complete in September 2015. 

Marchetti said: “This is a game-changing merger between two pioneering companies that have already radically transformed the marketplace since 2000 and will now shift the industry paradigm once again. Together, we plan to expand on our many combined successes and industry breadth to strengthen partnerships with the world’s leading luxury brands and harness a significant untapped growth potential.”

Richemont owns a portfolio of leading independent international brands that include jewellery maisons Cartier and Van Cleef & Arpels; specialist watchmakers A Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Officine Panerai, Piaget, Roger Dubuis, Vacheron Constantin, the Ralph Lauren Watch and Jewelry joint venture; and others like Montblanc, Alfred Dunhill, Chloé, Lancel and Net-A-Porter.

Yoox is a market leader with multi-brand online stores yoox.com, thecorner.com and shoescribe.com, as well as numerous mono-brand online stores. The group is also a partner of Kering, with which it has created a venture dedicated to the management of the mono-brand online stores of several of Kering’s luxury brands. 

The group has offices and operations in Europe, the US, Japan, China and Hong Kong and delivers to more than 100 countries worldwide.

A Reuters report said that luxury online sales currently make up only around 5 per cent of total luxury sales, while in shoes and handbags, they represent a little more than 8 per cent.