- Alibaba to launch Farfetch luxury shopping channels on Tmall
Luxury Pavilion and Luxury Soho; will also invest in newly formed
Farfetch China Joint Venture and in Farfetch Limited
- Richemont to invest in newly formed Farfetch China Joint
Venture and in Farfetch Limited; will also explore additional
opportunities to work closely with Farfetch
- Farfetch and Alibaba to leverage their platforms and
augmented retail technologies to accelerate the digitization of the
luxury industry; also forming a Steering Group, joined by
influential luxury leaders, Johann Rupert and François-Henri
Pinault
- Artemis to increase existing ownership in Farfetch with
additional investment
Farfetch (NYSE:FTCH), Alibaba Group (NYSE:BABA and HKSE:9988)
and Richemont (SWX:CFR) today announced a global strategic
partnership to provide luxury brands with enhanced access to the
China market as well as accelerate the digitization of the global
luxury industry. Leveraging each company’s respective expertise and
extensive reach, the partnership will bring luxury retail to the
next generation by seamlessly integrating the digital and physical
realms.
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the full release here:
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Farfetch to Launch on Alibaba’s Luxury Platforms in
China
Farfetch will launch luxury shopping channels on Alibaba’s
platforms, Tmall Luxury Pavilion and Luxury Soho, China's premier
luxury and luxury outlet destination within the Tmall marketplace,
as well as Alibaba's cross-border marketplace Tmall Global. The new
channels expand the reach of Farfetch’s global luxury platform to
Alibaba’s 757 million consumers, offering luxury brands a
multi-brand solution through a single integration with Farfetch.
This will provide luxury labels with a unique opportunity to
elevate their brand awareness, while also significantly expanding
their addressable market of luxury consumers through their
participation on Farfetch’s global marketplace. For luxury
consumers, this provides multiple ways to shop for their favorite
brands either through the Farfetch integration, or through the
already highly successful NET-A-PORTER integration on Tmall Luxury
Pavilion.
Strategic Investments in Farfetch and Farfetch China
As part of the global partnership, Alibaba and Richemont will
invest $600 million ($300 million each) in private convertible
notes issued by Farfetch Limited. Alibaba and Richemont will also
invest $500 million ($250 million each) in Farfetch China, taking a
combined 25% stake in a new joint venture that will include
Farfetch’s marketplace operations in the China region. In addition,
Alibaba and Richemont have an option to purchase a further combined
24% of Farfetch China after the third year of the joint venture’s
formation. Alibaba and Richemont will also explore additional
opportunities to work closely with Farfetch to provide services to
luxury brands. The investments by Alibaba and Richemont in Farfetch
China and the establishment of the joint venture are expected to be
completed during the first half of calendar year 2021, subject to
the satisfaction of closing conditions.
Separately, Artemis has also agreed to increase its existing
investment in Farfetch with a $50 million purchase of Farfetch’s
Class A ordinary shares.
Accelerating the Digitization of the Global Luxury
Industry
Luxury New Retail (“LNR”) is a visionary initiative which will
leverage Farfetch’s and Alibaba’s state-of-the-art omnichannel
retail technologies to serve the needs of luxury businesses,
including a full suite of enterprise solutions powered by Farfetch.
These solutions will serve both mono-brand and multi-brand
distribution strategies for luxury brands, including
fully-connected e-commerce websites and apps, omnichannel retail
technology, and access to the Farfetch and Tmall Luxury Pavilion
marketplaces via a single integration.
Farfetch and Alibaba have also formed a steering group to
further enhance the LNR initiative, which is aimed at leading the
digitization of the global luxury retail industry. Richemont
Chairman, Johann Rupert, and Artemis Chairman, François-Henri
Pinault, will join Farfetch and Alibaba on the LNR steering group
as founding members, bringing their combined decades of industry
leadership and expertise.
José Neves, Farfetch Founder, Chairman and CEO said: “This
announcement is a major step in our mission to connect the
curators, creators and consumers of the luxury fashion industry.
The $1.15 billion investment in Farfetch from Alibaba Group,
Richemont, and Artemis is a strong validation of our position as
the global platform for luxury.
The new initiatives with Alibaba Group and Richemont extend
Farfetch’s strategy to power the digital transformation occurring
across the luxury industry, which has been accelerated by the
unprecedented challenges resulting from the COVID-19 pandemic. The
Luxury New Retail initiative will explore ways we can help the
wider industry move forward and thrive in the post-COVID
world.”
Daniel Zhang, Chairman and CEO of Alibaba Group, said: “This
highly complementary partnership brings together some of the
world’s leading luxury retail and technology platforms,
representing another milestone in Alibaba’s strategy to meet the
rapidly growing demand for luxury products in China. The Chinese
luxury market – which is expected to account for half of global
luxury sales by 2025 – consists of hundreds of millions of young,
digitally-native consumers. By partnering with Farfetch and
expanding our existing relationship with Richemont, we will
accelerate the digitization of the global luxury retail industry
and transform the luxury shopping experience for consumers.”
Johann Rupert, Chairman of Richemont, said: “Building on our
successful joint venture with Alibaba, these developments represent
a further meaningful acceleration of our journey towards Luxury New
Retail. This initiative brings together a powerful combination of
highly complementary strengths - notably with our Maisons’ luxury
retail expertise and YOOX NET-A-PORTER’s deep brand partnerships,
expert curation and exceptional customer care - that will help us
deliver a seamless omnichannel experience to our discerning
clientele.
Partnerships make you stronger. I am delighted to partner with
Daniel, José, and François-Henri to bring our shared vision to
fruition, setting new standards for the future of luxury.“
François-Henri Pinault, Chairman, Artemis, said: “The growth
potential of luxury e-commerce has never been so promising, and the
importance of China for the luxury industry is only becoming more
obvious every day. Thanks to the vision of José Neves, Farfetch
played an important role in improving the omnichannel experience
for luxury customers in recent years. The investment by Artemis
demonstrates our belief in the future of Farfetch and I am
personally looking forward to exploring the future of luxury retail
with this group of visionaries and experts.”
Goldman Sachs International acted as Lead Financial Adviser and
Allen & Company LLC acted as Financial Adviser to Farfetch.
FARFETCH ISSUANCE OF $600 MILLION 0% CONVERTIBLE SENIOR NOTES
DUE 2030
In conjunction with the above strategic developments, Alibaba
Group and Richemont have each agreed to purchase $300 million of
the 0% convertible senior notes due 2030 (the “Notes”) issued by
Farfetch Limited (the “Company”) for total gross proceeds of $600
million. The additional capital will support Farfetch’s long-term
strategy of delivering a global technology platform for the luxury
fashion industry and facilitate the Company’s continued focus on
executing its growth plans and driving towards operational
profitability. The sale of the Notes to Alibaba Group and Richemont
is expected to settle on or about November 17, 2020, subject to
customary closing conditions.
In conjunction with its investment, Alibaba Group will nominate
one director to the Farfetch Board.
The Notes will mature on November 15, 2030 unless earlier
converted, redeemed or repurchased in accordance with their terms.
The Notes will not bear regular interest, and the principal amount
of the Notes will not accrete. At any time prior to the close of
business on the second scheduled trading day immediately preceding
the maturity date, a holder may convert the Notes at its option at
an initial conversion price of approximately $32.29, which reflects
a 22% premium to the volume-weighted average price over the
trailing thirty (30) trading day period ending on October 30, 2020.
Upon conversion, the Notes will be settled in Class A ordinary
shares of the Company (with the Company’s right, in certain
circumstances, to settle the Notes in its Class A ordinary shares,
cash or a combination thereof, at the Company’s election). If
certain events occur that constitute a “fundamental change” (as
defined in the indenture governing the terms of the Notes), holders
of the Notes will have the right to require the Company to
repurchase all or some of their Notes for cash at a repurchase
price equal to 100% of their principal amount, plus all accrued and
unpaid special interest, if any, to, and including, the maturity
date. The Company will, under certain circumstances, increase the
conversion rate for holders who convert Notes in connection with a
fundamental change.
Alibaba Group and Richemont may require the Company to
repurchase all or part of their respective Notes on June 30, 2026
at a repurchase price equal to 100% of the principal amount of the
Notes to be repurchased, plus accrued and unpaid special interest,
if any, to, but excluding, such repurchase date.
The Company will not be able to redeem the Notes prior to
November 15, 2023, except in the event of certain tax law changes.
On or after November 15, 2023, the Company may redeem, for cash,
all or part of the relevant Notes if the last reported sale price
of its Class A ordinary shares has been at least 130% (or 200%, if
a substantial portion of the relevant Notes are held at the time by
Alibaba Group or Richemont) of the conversion price then in effect
for at least 20 trading days (whether or not consecutive) during
any 30 consecutive trading day period (including the last trading
day of such period) ending on, and including, the trading day
immediately preceding the date on which the Company provides notice
of the redemption, at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed, plus accrued and
unpaid special interest, if any, to, but excluding, the redemption
date.
When issued, the Notes will be the Company’s senior unsecured
obligations and will rank senior in right of payment to any of the
Company's unsecured indebtedness that is expressly subordinated in
right of payment to the Notes; equal in right of payment to any of
the Company's unsecured indebtedness that is not so subordinated;
effectively junior in right of payment to any of the Company's
secured indebtedness to the extent of the value of the assets
securing such indebtedness; contractually subordinated to the
Company’s 5.00% Convertible Senior Notes due 2025; and structurally
junior to any indebtedness and other liabilities (including trade
payables) of the Company's subsidiaries.
ARTEMIS INVESTMENT DISCLOSURE
In conjunction with the above strategic developments, Artemis
has agreed to purchase 1,889,338 Class A ordinary shares issued by
Farfetch for total gross proceeds of approximately $50 million. The
issuance of shares to Artemis is expected to settle on or about
November 17, 2020 subject to customary closing conditions.
Conference Call Information
Farfetch will host a conference call tomorrow, November 6, 2020
at 8:00 a.m., Eastern Time to discuss the foregoing transactions
and ventures. Listeners may access the live conference call via
audio webcast at http://farfetchinvestors.com where listeners can
also access the accompanying slide presentation. Following the
call, a replay of the webcast will be available at the same website
for at least 30 days.
Forward Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements contained in this release that do not relate to
matters of historical fact should be considered forward-looking
statements, including, without limitation, any further transactions
and any related benefits, including the Farfetch China joint
venture and Luxury New Retail, future opportunities and anticipated
business levels, future financial or operating performance, planned
activities and objectives, anticipated growth resulting therefrom,
market opportunities, strategies, competition and other
expectations, and/or whether Farfetch will complete the issuance of
the Notes and/or the Class A ordinary shares, and assumptions
underlying such statements, as well as statements that include the
words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,”
“estimate,” “may,” “should,” “anticipate” and similar statements of
a future or forward-looking nature. These forward-looking
statements are based on management’s current expectations. These
statements are neither promises nor guarantees, but involve known
and unknown risks, uncertainties and other important factors that
may cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements, including the factors discussed under the caption “Risk
Factors” in our Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission (“SEC”) for the fiscal year
ended December 31, 2019, as such factors may be updated from time
to time in our other filings with the SEC, which are accessible on
the SEC’s website at www.sec.gov and the Investors page of our
website at www.farfetchinvestors.com. In addition, we operate in a
very competitive and rapidly changing environment, and new risks
emerge from time to time. It is not possible for our management to
predict all risks, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements that we may make. In
light of these risks, uncertainties and assumptions, the
forward-looking events and circumstances discussed in this release
are inherently uncertain and may not occur, and actual results
could differ materially and adversely from those anticipated or
implied in the forward-looking statements. Accordingly, you should
not rely upon forward-looking statements as predictions of future
events. In addition, the forward-looking statements made in this
release relate only to events or information as of the date on
which the statements are made in this release. Except as required
by law, we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events.
ABOUT FARFETCH
Farfetch Limited is the leading global platform for the luxury
fashion industry. Founded in 2007 by José Neves for the love of
fashion, and launched in 2008, Farfetch began as an e-commerce
marketplace for luxury boutiques around the world. Today the
Farfetch Marketplace connects customers in over 190 countries with
items from more than 50 countries and over 1,300 of the world’s
best brands, boutiques and department stores, delivering a truly
unique shopping experience and access to the most extensive
selection of luxury on a single platform. Farfetch’s additional
businesses include Farfetch Platform Solutions, which services
enterprise clients with e-commerce and technology capabilities;
Browns and Stadium Goods, which offer luxury products to consumers;
and New Guards, a platform for the development of global fashion
brands. Farfetch also invests in innovations such as its Store of
the Future augmented retail solution, and develops key
technologies, business solutions, and services for the luxury
fashion industry. For more information, please visit
www.farfetchinvestors.com.
ABOUT ALIBABA GROUP
Alibaba Group’s mission is to make it easy to do business
anywhere. The company aims to build the future infrastructure of
commerce. It envisions that its customers will meet, work and live
at Alibaba and that it will be a good company that lasts for 102
years.
ABOUT RICHEMONT
Richemont owns a portfolio of leading international Maisons
recognised for their distinctive heritage, craftsmanship and
creativity. The Group operates in four business areas: Jewellery
Maisons, namely Buccellati, Cartier and Van Cleef & Arpels;
Specialist Watchmakers, namely A. Lange & S�hne, Baume
& Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget,
Roger Dubuis and Vacheron Constantin; Online Distributors,
namely YOOX NET-A-PORTER GROUP (NET-A-PORTER, MR PORTER, YOOX, THE
OUTNET) and Watchfinder & Co.; and Other, primarily
Fashion & Accessories Maisons, including Alaïa, Chloé, dunhill,
Montblanc and Peter Millar.
ABOUT ARTEMIS
Artemis was founded in 1992 by French entrepreneur François
Pinault. Artemis is the controlling shareholder of global Luxury
group Kering (Gucci, Saint Laurent, Bottega Veneta, Balenciaga,
Alexander McQueen, Brioni, Boucheron, Pomellato, Dodo, Qeelin,
Ulysse Nardin, Girard-Perregaux, and Kering Eyewear). Artemis also
owns a range of prestigious companies such as Christie’s auction
house, Chateau Latour vineyards and Ponant expedition cruises. As a
professional shareholder, Artemis is focused on long-term growth
and value creation.
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Farfetch Investor Relations:
Alice Ryder VP Investor Relations IR@farfetch.com
Farfetch Media: Susannah
Clark VP Communications, Global susannah.clark@farfetch.com +44
7788 405224
Brunswick Group farfetch@brunswickgroup.com US: +1 (212) 333
3810 UK: +44 (0) 207 404 5959
Alibaba Group: Julia
Hutton-Potts j.hutton-potts@alibaba-inc.com +44-7307807007
Holly Zhao holly.zhao@alibaba-inc.com +1-5054693316
Ivy Ke ivy.ke@alibaba-inc.com +852-55909949
Richemont: Sophie Cagnard,
Group Corporate Communications Director James Fraser, Investor
Relations Executive Investor/analyst enquiries: +41 22 721 30 03;
investor.relations@cfrinfo.net Media enquiries: +41 22 721 35 07;
pressoffice@cfrinfo.net; richemont@teneo.com
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