Fashion victim
Farfetch goes out of style
Good morning, trend trailblazers. This is your Stock Market Rundown for December 7th, 2023. Thanks for tuning in. Let’s get started:
TODAY’S TOP STORY: FROM CATWALK TO E-COMMERCE
He’s been called the most powerful man in fashion. Portuguese businessman José Neves created Farfetch in 2008 to be a digital marketplace for luxury fashion, making a commission off the sale of each silk shirt or alligator purse. If you think $800 is a reasonable amount of money to spend on a pair of pants, this website is for you.
Today, Farfetch ships brands like Prada, Balenciaga, and Off-White to customers in 190 countries, and employs over 6,000 staff globally. I’m guessing their office is a nonstop fashion show, with accountants rocking Kenzo sweatshirts at budget meetings, and a front closet full of Moncler puffer jackets.
For years, Farfech thrived by translating the aspirational vibe of an upscale boutique to the ecommerce world. It had the high-end merchandise, without the snobby salespeople, and customers loved it.
In 2018, the business listed on the NYSE; Neves himself made over a billion dollars from the IPO. But recently, things at the company are as distressed as a pair of pre-ripped Dolce & Gabbana jeans.
The stock has plummeted 75% so far this year, with Farfetch losing money and suffering from sales declines as the luxury retail market is buffeted by macroeconomic uncertainty.
Rumors are flying that Neves, who still controls the business, is looking to take the company private, delisting it from public markets. It’s going to take more than a change in hemline length to turn this business around.
SO WHAT ELSE IS GOING ON?
Building a Slurpee empire: the operator of 7-11 stores in Japan just acquired the operator of 7-11 stores in Australia. I feel like in Japan you could actually buy one of those hot dogs off the roller grill and it wouldn’t give you food poisoning.
Automotive competitors Mercedes-Benz and BMW are working together to build a charging network for electric vehicles in China. This is like Harry Potter and Draco Malfoy working together to win the battle of Hogwarts.
Is Great Britain ready for meme stocks? Stock trading app Robinhood is launching in the UK. The platform is going international to compensate for declining activity in the US. There’s always a bull market somewhere.
The next time you want to return shoes that don’t fit or a sweater that just isn’t the right shade of periwinkle, don’t be surprised if the retailer says “keep it.” A quarter of US retailers are quietly moving to “returnless” policies. Another perk of shopping online, though I do miss having somebody wearing a nametag tell me how amazing those jeans look on me.
Signing off for now, folks; let's continue our conversation tomorrow morning. Yours in capitalism, The Axe
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