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Add to basket: Amazon planning to acquire luxury retailer Net-A-Porter

Amazon might be preparing its largest acquisition to date - trumping the £650 million buyout of streaming service Twitch.TV in 2014 - for luxury online retailer Net-A-Porter.

First reported by Women’s Wear Daily and confirmed by Forbes later in the week, it would be a huge move by Amazon to try and get involved in the luxury fashion market. In 2012, Amazon CEO Jeff Bezos claimed they would push into the market, but for the past three years we have seen little evidence of that push.

Net-A-Porter has been rumored to be up for sale for quite some time, after failing to reach operating profit. The sales in 2014 equate to £560 million, but Amazon would need to make operating cut-backs to ensure it isn’t losing any more money.

This lack of profit has dropped the valuation price for Amazon lower than the $2 billion (£1.34 billion) reported by Women’s Wear Daily. There is no solid figure, but somewhere around $1.3 to $1.5 billion (£870 million to £1 billion) is on point.

It would not be the first acquisition of a women’s fashion site, in 2006 Amazon acquired ShopBop, but was incapable of making any headway in the fashion market afterwards.

This means Amazon would need to maintain Net-A-Porter in order to make it work. If it simply integrates the clients onto Amazon, it will run the same risk it did with ShopBop almost a decade ago.

Net-A-Porter is a place for high-priced fashion, while Amazon is known for discounts, cheap deals and free delivery. The two need to be separate in some way to work together, but Amazon has not disclosed what it will do once Net-A-Porter has been acquired.

Amazon is not one for big acquisitions. Compared to its rivals Google, Microsoft and Facebook, it has spent considerably less on acquiring talent and products over the past decade, mostly due to Jeff Bezos reliance on his own teams to build products and services.

Instead of acquiring an e-reader company, they built one. Instead of acquiring a tablet or mobile maker, they built a tablet and smartphone. The ethos is Amazon is able to build from the ground up studios and services, but for luxury fashion they need some outsider help.

David has been a technology journalist for over six years, covering a wide range of sectors. He currently researches apps, app sectors and app markets for Business of Apps, and has written for ITProPortal, RTInsights, ReadWrite, and Digital Trends.