Farfetch-Yoox-Net-A-Porter partnership “inevitable” as luxury marketplace channels expand
After years of competition, the specialist said the potential partnership would “both help and supply each” company, combining a “very strong retailer” with a platform that has a “very strong marketplace”. The specialist said that Richemont’s public comments on the deal made a partnership “pretty likely”, but they also identified two potential hurdles that need to be overcome to ensure a deal is reached.
The specialist said the increasing number of maisons from Richemont, which owns YNAP, using Farfetch would add “huge amounts of value” to the platform. Farfetech had previously tried to incorporate hard luxury onto its platform with limited success, but the specialist believes it will be more “positive” this time thanks to the reputation of Richemont’s maisons that will help increase Farfetech’s AOVs.
Adding maisons from Richemont to Farfetch would also help attract more brands to the company’s in-house service agency Farfetch Platform Solutions (FPS) – something the specialist said can be challenging given the “sheep-like” nature of luxury fashion brands to appear on new platforms. The specialist said that FPS is a young but growing business that will become more profitable as more brands join.
The hard luxury market is “an exciting opportunity” for GMV growth at Farfetch because AOV rates on these products are high and the platform has a “vast” private client base. However, the specialist warned that there are still challenges for Farfetch to overcome given hard luxury is traditionally purchased offline.
In recent years, Farfetch has tried to become involved in first and third-party operations, but the specialist believes this hybrid approach may have its limits. Farfetch should focus on first party, the specialist suggested, after its previous attempt to move into third party with the acquisition of New Guards Group in 2019 resulted in a significant drop in share price.
Overall, the specialist was bullish on Farfetch’s future and luxury marketplace channels in general, which they expect to expand long term.
To access all the human insights in Third Bridge Forum’s Farfetch, Yoox-Net-A-Porter & the future of online luxury, click here to view the full transcript.
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