Last Monday, Farfetch, an E-commerce marketplace, filed an intention to list on the New York Stock Exchange. The company is based in the United Kingdom. It specialises in luxury brands and high-end fashion.
No further details were given regarding the amount that the company expects to raise or the offer price per share, however, Pitchbook, an analytics firm, valued the listing to take in as much as $8.4 billion (£6.6 billion) after it goes public.
Jose Neves, the founder of the app, is hoping that the company would be able to capitalise on the expanding e-commerce industry, in which the luxury retail sector continues to be “in its infancy.” According to Bain, a consultancy firm, only nine percent of all the luxury sales last year were conducted online as compared to the recent trends in the United Kingdom which saw online retail surpass physical stores in terms of sales this summer.
Farfetch operates an online marketplace for various luxury brands including Burberry and Chanel. It opts to not hold the stock itself. It instead provides an e-commerce vehicle for the sector. The firm has yet to turn a profit, as the filing disclosed losses amounting to $68 million during the first six months of the current year. Last year, the revenue of Farfetch rose by 59 percent to $386 million.
In 2017, JD.com, a Chinese e-commerce giant, invested $397 million in Farfetch. It has agreed to acquire more shares in order to retain its undisclosed stake after listing.
JP Morgan, Goldman Sachs, UBS, Allen & Co, Deutsche Bank, Credit Suisse, Cowen, BNP Paribas, and Wells Fargo are set to underwrite the said listing.
The news was released amid a competitive year in the sector, after Yoox Net-a-porter, the most direct rival of Farfetch, exited the Italian stock market last May. It was acquired by Richemont, the Cartier parent, for €5.3 billion (£4.8 billion). Other competitors include Mytheresa and Matchesfashion.