Farfetch tops price range in IPO in boon to luxury market

September 24, 2018

PARIS/NEW YORK: Farfetch priced its shares above its targeted range on Friday in a New York flotation that values the online luxury retailer at over $5.8 billion and underscores how big a bet web sales have become for high-end brands. E-commerce is emerging as one of the biggest growth drivers for luxury labels initially fearful of diluting their image by selling online.

London-based Farfetch — a 10-year-old site that connects shoppers to hundreds of boutiques and fashion labels but carries no inventory — is one of a clutch of rapidly-expanding multi-brand platforms that got an early foothold in the market.
The company’s shares were trading as much as 39 per cent above its initial public offering at $20 per share on the New York stock exchange on Friday — surpassing the range of $17 to $19 that already had been increased.
It will raise $885 million in the listing, with the company issuing 33.6 million new shares and existing shareholders, including early backers such as Advent Venture Partners and Vitrurian Partners, selling 10.6 million.
The IPO values Farfetch, founded by Portuguese entrepreneur Jose Neves, at $5.8 billion according to the share count available in its latest filings. When including employee share options this would rise to $6.3 billion, the company said.
Existing Farfetch investors include JD.com, China’s second largest e-commerce firm, which bought extra shares along the listing in a private placement.
The flotation comes at a time of growing competition among independent online fashion retailers and luxury groups rolling out their e-commerce operations, including cash-rich luxury heavyweights like Louis Vuitton owner LVMH, which is experimenting with its own multi-brand site. — Reuters