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Farfetch, a luxury e-commerce specialist, invests in the Cartier jeweler’s platform

Symbol Price To change %To change
FTCH $9.46 1.62 20.66

Richemont on Wednesday announced a long-awaited deal to offload the bulk of its online fashion retailer YOOX Net-A-Porter (YNAP), paving the way for its labels to sign up for the technology run by the e-commerce specialist luxury Farfetch.

Jewelry maker Cartier and watchmaker IWC said it expects a 2.7 billion euro ($2.68 billion) writedown related to the deal in which Farfetch will initially acquire a 47-year stake. .5%, in exchange for more than 50 million Farfetch shares. The estimated depreciation could fluctuate depending on the quoted price of Farfetch shares and exchange rates, Richemont added.

Shares of Farfetch have lost 60% in the past six months and have missed sales expectations in the first quarter due to trade disruptions from shutdowns in China as well as a loss of sales in Russia.

“This seems like very good news for both companies,” Bernstein analyst Luca Solca said.

While Richemont will remove a “continuing source of losses”, Farfetch will benefit from a welcome increase in traffic through online franchise agreements with Richemont’s labels, he said.

The deal comes amid a wave of industry-wide investment in digital services as luxury players shrug off past skepticism and embrace new channels to reach customers, spurred by a shift more fast to online consumption during the pandemic.

In a call with reporters on Wednesday, executives from Farfetch and Richemont 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 distributors, including watch marketplace Watchfinder, still posted an operating loss of 210 million euros in the fiscal year ended March. .

Farfetch, on the other hand, operates like an inventory-free marketplace, making money by connecting shoppers to brands and charging commissions.

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