Condé Nast recently divested its substantial £234 million stake in the high-end online marketplace Farfetch. According to reports, concerns over the company’s lavish spending on marketing initiatives drove this decision. The renowned publisher of Vogue initially acquired a 6% ownership interest in Farfetch back in 2017, a move that came about after its Style.com online store shut down. This closure ultimately redirected Style.com’s clientele to Farfetch, which also gained access to the defunct website’s brand, inventory, and customer information as part of the deal.
Under the leadership of its founder José Neves, Farfetch is currently trading on the New York Stock Exchange. Despite achieving a noteworthy 56% surge in sales last year, totaling £475 million, the company also disclosed a mounting loss of £122.7 million. Nevertheless, Farfetch remains committed to substantial investments in promotional campaigns, customer outreach, and technological advancements, all in an effort to pave the way for future expansion.
After launching its initial public offering (IPO) last fall, Farfetch’s shares debuted at $28.45 and even climbed over $30 within the first few days following its market debut. However, the share price tumbled to a low of $16.40 earlier this year before settling at $19.93 by the end of last week. This volatility echoes a common trend seen in retail and fashion IPOs, as investors closely monitor the company’s progress towards profitability.
While neither Condé Nast nor Farfetch have issued official statements regarding the recent stake transaction, as outlined in a report by The Sunday Times, it is evident that Farfetch’s ambitious growth trajectory and financial performance will remain subjects of interest within the luxury retail sector.
Read more about Condé Nast’s stake sale from The Guardian
Click here to find out more about Farfetch’s recent developments from Forbes
