Farfetch

Farfetch is an online luxury fashion retail platform that sells products from over 700 boutiques and brands from around the world.[1] The company was founded in 2007 by the Portuguese entrepreneur José Neves with its headquarters in London and main branches in Porto, Guimarães, Braga, Lisbon, New York, Los Angeles, Tokyo, Shanghai, Hong Kong, São Paulo and Dubai.

Farfetch Limited
Screenshot
Type of businessPublic
Available inEnglish, French, Japanese, Chinese, Portuguese, Korean, German, Italian, Russian, Spanish, Arabic, Dutch, Danish, Swedish
Traded asNYSE: FTCH
FoundedJune 2007
HeadquartersLondon, England
Key peopleJosé Neves, founder and CEO
IndustryE-commerce
ProductsClothes, shoes, accessories, jewellery, designer
Employees3,000
URLfarfetch.com

The e-commerce company operates local-language websites and mobile apps for international markets in English, Spanish, French, Japanese, Chinese, Arabic, German, Portuguese, Korean, Italian and Russian.[2] Farfetch has offices in 11 cities and employs over 3,000 staff[3].

History

Farfetch was founded in 2007 by José Neves,[4] a Portuguese entrepreneur who has been active in the world of fashion start-ups since the 1990s, when he launched the shoe design business SWEAR. In 2001 he created B Store, a fashion licensing and wholesale company selling a range of up-and-coming designer labels in a physical store. During a trip to Paris Fashion Week in 2007, when Neves was wholesaling for his B Store brand, the idea for a virtual boutique marketplace came to fruition.[5] A 2013 interview in The Daily Telegraph details the moment when Neves realised the need to give independent fashion boutiques an online retail presence: "Dozens of boutique owners had been through our doors and what they were saying was really sobering. Business was bad, they couldn't rely on local custom any more but they didn't have the experience to do e-tailing either. They had amazing taste levels but they were having to play it increasingly safe."[6]

It was this reason that Neves decided to set up Farfetch to enable small, independent boutiques to compete in the marketplace while retaining their 'bricks and mortar' stores and their own visual identity. A 2013 article in The Economist summarises this: "Farfetch emphasises its 'bricks and mortar roots," allowing independent retailers to "keep their identity, while boosting their position in the market."[7]

Initially, the business secured $4.5 million in growth equity from Advance Venture Partners in July 2010 to expand into Brazilian, North American and European markets.[8]

In March 2015, Farfetch gained a further US$86 million from an investment group led by DST.[9] Former investors also contributed to this Series E funding round, which took the total investment pot to over US$195 million. Investors included Advent Ventures Partners, Condé Nast International, Index Ventures, Novel TMT, e.ventures and Vitruvian Partners.[10]

Collectively, these additional investments resulted in the company being valued at US$1billion in March 2015. This led to the company being branded as a 'unicorn' company by media commentators, a term used to denote start-ups valued at $1billion+.[11]

Farfetch announced its acquisition of London boutique retailer Browns in May 2015.[12] This boutique is run independently from Farfetch by a newly-appointed CEO Holli Rogers who joined the business in July 2015. Rogers was the former fashion director of online retailer Net-A-Porter.[13]

Farfetch developed the proprietary business units Farfetch Black & White[14] and Store of the Future in 2015.[15]

In May 2016, Farfetch secured a Series F round of investment of US $110 million, led by new investors Temasek, IDG Capital Partners and Eurazeo with existing investor Vitruvian Partners participating.[16]

In August of that year, Farfetch served its millionth online customer.[17]

In June 2017, it was announced that JD.com Inc. had bought a stake in Farfetch for $397 million. It was the Chinese e-commerce company’s largest overseas investment.[18]

In September 2018, the company went public.[19][20]

Management

Farfetch is led by José Neves, the founder of the business.[21].

IPO

In September 2018, Farfetch (FTCH.N) listed on the New York Stock Exchange (NYSE)[22], pricing shares above the estimated targeted range leading to a valuation of over $5.8 billion. The IPO raised $885 million for the company after the issue of 33.6 million new shares. Early investors in Farfetch including Vitrurian Partners and Advent Venture Partners, sold up to 10.6 million shares.[23] It was reported that Neves will net $1.2 billion from the IPO.[24]

On 24 September 2018, animal rights activist organization PETA announced that they had purchased shares that would allow them to attend annual shareholder meetings and stop the company from selling fur products.[25]

Current operations

Farfetch achieves approximately 10 million site visits per month and ships to customers in almost 190 countries.[26] As of September 2014, "annual sales of merchandise through the Farfetch site…surpassed £167 million." The business continues to grow, and in 2013, it retailed products from over 1500 global fashion brands, attracting 4.3 million weekly visitors to the site. The average spend of the Farfetch customer was stated as $680 per order in a New York Times article from March 2013.[27]

Farfetch makes the majority of its revenue from luxury brands such as Valentino, Saint Laurent, Givenchy, Bottega Veneta, Benedetta Dubini, Burberry and Comme des Garcons, but emerging and lesser known labels are said to be key to the Farfetch business.[28]

Following the Conde Nast investments in 2013, Farfetch launched a programme of further expansion to raise brand awareness and market share in countries including the US, Germany, Eastern Europe, Scandinavia and Japan.[29]

In December 2018, Farfetch acquired online sneaker platform, Stadium Goods, for $250 million.[30] In February 2019, Farfetch agreed to merge its Chinese business with JD.com.[31]

In August 2019, Farfetch acquired New Guards Group, the parent organisation of Off-White designer label for US$675million.[32] Immediately following the purchase, Farfetch's shares plunged by over 40 percent.

Awards and accolades

Farfetch and its representatives have received a number of industry and e-commerce awards:

  • Winner: Best New E-tailer Awards – The Drapers E-tail Awards[33]
  • Winner: Best Fashion Start-up – The European Tech Start-up Awards[34]
  • Winner: Rising Star Advertiser – Golden Link Awards from Rakuten Affiliate Marketing[35]
  • Winner: Digital Direction Award – The Luxury Briefing Awards[36]
  • Winner: CEO of the Year (José Neves) – Digital Masters Awards[37]
  • Winner: Excellence in General Management (Andrew Robb) – Digital Masters Awards[37]
  • Winner: Best E-Store – WGSN Global Fashion Awards[38]
  • Winner: Best Organic Search Campaign – Performance Marketing Awards[39]
  • Winner: Grand Prix Award – Performance Marketing Awards[39]
  • Winner: Best Use of Tech in the Digital Economy Award – UK Tech Awards 2017[40]

See also

References
  1. "Online fashion curator FarFetch, which links shops to customers, grows in China". South China Morning Post. Retrieved 9 February 2017.
  2. "Farfetch's Global Platform Play". The Business of Fashion. 5 April 2015. Retrieved 9 February 2017.
  3. Costa, Isabel Cristina (November 2017). "A Caminho da Bolsa". Forbes Portugal: 50–55.
  4. "Jose Neves". Crunchbase.com. Retrieved 23 December 2014.
  5. "Farfetch Fashion Curators". Wired.co.uk. Archived from the original on 23 December 2014. Retrieved 23 December 2014.
  6. "What if the internet turns out to be the saviour of the high street?". Fashion.telegraph.co.uk. Archived from the original on 23 December 2014. Retrieved 23 December 2014.
  7. "High end fashion online". Economist.com. Retrieved 23 December 2014.
  8. "Advent invests $4.5 million in farfetch". Growth Business. 9 July 2010. Retrieved 9 February 2017.
  9. Farfetch. "Global E-Commerce Marketplace Farfetch Announces a US$86 Million Series E Round of Investment Led by DST Global". www.prnewswire.com. Retrieved 9 February 2017.
  10. Farfetch. "Global E-Commerce Marketplace Farfetch Announces US $110 Million Series F Round of Investment". www.prnewswire.com. Retrieved 9 February 2017.
  11. DiChristopher, Tom (8 March 2015). "Mix of fashion, Wall Street not so 'Farfetch'-ed". CNBC. Retrieved 9 February 2017.
  12. Milligan, Lauren. "Farfetch Buys Browns". British Vogue. Retrieved 9 February 2017.
  13. Binkley, Christina (12 May 2015). "Online Retailer Farfetch Buys London's Browns Fashion Boutique". Wall Street Journal. ISSN 0099-9660. Retrieved 9 February 2017.
  14. "BoF Exclusive | Farfetch Opens E-Commerce Platform to Brands". The Business of Fashion. 9 September 2015. Retrieved 9 February 2017.
  15. "Farfetch to unveil plans for its 'Store of the Future'". Fashion & Mash. 8 December 2016. Retrieved 9 February 2017.
  16. "Global E-Commerce Marketplace Farfetch Announces $110 Million Series F Round". Index Ventures. 4 May 2016. Retrieved 9 February 2017.
  17. Fraser, Kristopher. "Farfetch valued at one billion dollars, hits one millionth customer". Retrieved 9 February 2017.
  18. "JD.com Pays $397 Million for Stake in Fashion Shop Farfetch". Bloomberg.com. 22 June 2017. Retrieved 22 June 2017.
  19. "José Neves Nets $1.2 Billion in Farfetch IPO". The Business of Fashion. 21 September 2018. Retrieved 14 October 2018.
  20. "Shares in Luxury Marketplace Farfetch Soar 50% After IPO, Minting a New Billionaire". Fortune. Retrieved 14 October 2018.
  21. "Strong Luxury Goods Brands May Be Immune to Crisis". Bloomberg.com. Retrieved 23 December 2014.
  22. "FARFETCH LTD (FTCH) IPO". NASDAQ.com. Retrieved 23 November 2018.
  23. White, Sarah. "Farfetch tops price range in IPO in boon to luxury market". U.S. Retrieved 23 November 2018.
  24. "José Neves Nets $1.2 Billion in Farfetch IPO". The Business of Fashion. 21 September 2018. Retrieved 23 November 2018.
  25. Elven, Marjorie van. "PETA buys Farfetch shares to push company to stop selling fur". Retrieved 29 November 2018.
  26. "UK leads world's ecommerce exports as fashion brands travel well". Retrieved 9 February 2017.
  27. "Condé Nast Invests in e-Commerce". Luxury-Nytimes.com. Retrieved 23 December 2014.
  28. "Farfetch marketing boss: "Everyone is trying to create the offline experience, online"". Retailgazette.co.uk. Retrieved 23 December 2014.
  29. Jones, Nina (14 October 2014). "Farfetch Branches Out in Asia". WWD. Retrieved 9 February 2017.
  30. "Farfetch acquires online sneaker platform, Stadium Goods, for $250m". The Hustle. 14 December 2018. Retrieved 17 December 2018.
  31. "Farfetch to merge China sales platform with JD.com". Financial Times. 14 December 2018. Retrieved 19 April 2019.
  32. Fernandez, Chantal (8 August 2019). "Why Farfetch Bought New Guards Group". Business of Fashion. Retrieved 9 August 2019.
  33. "Best Online". Vogue.co.uk. Retrieved 23 December 2014.
  34. "The Europas Awards – The Winners". Theeuropas.com. Archived from the original on 8 April 2015. Retrieved 23 December 2014.
  35. "Meet the Rising Star Advertiser: Farfetch". Blog.marketing.rakuten.com. Retrieved 23 December 2014.
  36. "Digital Direction Awards". Luxury-briefing.com. Archived from the original on 23 December 2014. Retrieved 23 December 2014.
  37. "Digital Masters Award Winners 2015". theguardian.com. Retrieved 5 June 2015.
  38. "WGSN Global Fashion Awards Winners 2015". globalfashionawards.wgsn.com. Retrieved 14 May 2015.
  39. "Performance Marketing Awards Winners 2015". performancemarketingawards.co.uk. Retrieved 29 April 2015.
  40. "UK tech awards 2017 :: Winners". www.uktech-awards.co.uk. Retrieved 9 February 2017.
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