Luxury e-commerce specialist Farfetch wins investment in jewelery maker Cartier’s platform A-Porter ( YNAP ), paving the way for its Cartier jewelry and IWC watchmaker said it expected a 2.7 billion euro ($2.68 billion) write-down related to the deal in which Farfetch will initially acquire a stake of 47.5%. in exchange for more than 50 million Farfetch shares.
The estimated write-down could fluctuate, depending on Farfetch’s listed share price and exchange rates, Richemont added. Farfetch shares have lost 60% over the past six months, missing first-quarter sales expectations due to business disruptions from the China lockdown as well as a loss of sales in Russia.
“This is very good news for both companies,” the Bernstein analyst said. Luca Solca While Richemont will eliminate an “ongoing source of loss,” Farfetch will get a nice boost in traffic from e-concession deals with Richemont stamps, he said.
luxury players are rejecting past skepticism and embracing new channels to reach customers, spurred by a faster shift to online consumption during the pandemic. In a call with reporters on Wednesday, Farfetch and Richemont executives emphasized their goal of making YNAP a “neutral and open platform.” “for the industry. Despite heavy investments in YNAP over the years, Richemont’s online retailers, including watch marketplace Watchfinder, still posted an operating loss of €210 million in the fiscal year to March .had begun to move toward a lighter inventory “hybrid” business model, Farfetch, meanwhile, operates as a marketplace without inventory, making money by connecting shoppers with brands and charging commissions.