Specialist
Former senior director at Farfetch
Agenda
- Why is Farfetch (NYSE: FTCH) investing directly in Ynap (Yoox Net-A-Porter) and what does this mean for the global luxury online market?
- Impact of Richemont’s (VTX: CFR) Maisons selling via Farfetch and potential acceleration of hard luxury GMV growth
- FPS’s (Farfetch Platform Services’) GMV growth outlook and new brand acquisition opportunities, including unit economics impact
- Shift towards hybrid first- and third-party model and impact on revenue and GMV growth at Farfetch and Ynap
- Additional consolidation expectations, including scope for deeper collaboration
Questions
1.
Could you discuss Farfetch’s most recent announcements regarding the potential investment into Ynap [Yoox Net-A-Porter]? How confident are you that some deal or partnership will be reached between Farfetch and Ynap, given this is still in the negotiation phase?
2.
What do you consider the key hurdles to a deal being reached between Farfetch and Ynap?
3.
How can Farfetch and Ynap work around the issue of being both suppliers and competitors, or at least being joined at the back end but competing at the front end? What are the options?
4.
What shape or level of integration would you expect? We’ve heard some preliminary thoughts from the two. What is the strategically best level of integration and how can these two work together?
5.
We’re hearing about the Richemont Maisons moving onto the Farfetch platform and this being a synergy opportunity for both players. How many Maisons could move onto the Farfetch platform, given the brands’ propositions?
6.
What could hard luxury provide around meaningful GMV contribution? How large could this category become in Farfetch’s mix?
7.
What are the challenges to converting a hard luxury sale online vs soft luxury? How much harder is it?
8.
You mentioned FPS [Farfetch Platform Solutions] as one of the company’s key opportunities, and I think the market considers it this way as well. How are you expecting the Maisons to lever the FPS? Which services or solutions?
9.
What do you think Richemont moving onto to the Farfetch platform could mean for additional brands signing up to FPS, given the credibility Richemont brings with its Maisons?
10.
What do you think LVMH could do, given its two key brands, Louis Vuitton and Dior, appear to be pursuing the direct strategy? Do you expect any change there?
11.
How large could FPS’s GMV contribution be? How meaningful a part of the business could it become?
12.
What do you think are the main adoption hurdles for brands, Maisons or Ynap coming onto or signing up to FPS?
13.
To what extent could the Farfetch-Ynap partnership be an opportunity for Farfetch to learn from Ynap around curation and improve customer acquisition or retention and GMV?
14.
What are your profitability expectations for FPS? Farfetch talks about the division being EBITDA-positive, and you mentioned some potentially attractive commission rates to bring brands on board.
15.
What is the path to profitability for the Farfetch group? Obviously, this has been a key part of the growth strategy reaching full-year profitability.
16.
You mentioned distinguishing between first party and third party, so Ynap focusing on its strengths in first party and Farfetch focusing on its strengths in third party. Conversely, there’s been a shift with Ynap pushing more into third party and Farfetch discussing first party. What are your expectations around this operating model shift for both players?
17.
What are your thoughts on a potential deeper collaboration? Obviously, this is just Farfetch’s initial investment into Ynap. What could this mean for further long-term consolidation and any potential mergers?
18.
What does the Farfetch-Ynap partnership mean for smaller players? You’ve mentioned Matches, and we also have listed players such as Mytheresa and SSense, which received investment recently.
19.
What are your expectations for the shape of the online luxury market? Could there be multiple players long term or just a few?
20.
