April 25, 2024
The folly of multi-brand fashion online?
“Selling fashion online from a multi-brand platform is a bad business, as the disastrous experience of Farfetch demonstrates,” Bernstein Analyst Luca Solca (LinkedIn, @LucaSolca)
“Selling fashion online from a multi-brand platform is a bad business, as the disastrous experience of Farfetch demonstrates,” Bernstein Analyst Luca Solca (LinkedIn, @LucaSolca)
Luca Solca’s quote from a recent article in The Fashion Law caught my attention. ‘Sure’, I thought. ‘Some of these businesses haven’t done that well, but how disastrous is disastrous?’
Farfetch
2018 IPO with $6.2 billion market cap
2018 bought Stadium Goods for $250 million
2019 bought New Guards Group (Off-White, Palm Angels) for $675 million
2021 valuation reaches high of $23 billion
2022 offers to buy almost half of YNAP for $1 billion
2023 sells its assets through prepackaged process to Coupang for $500 million
Yoox Net-a-Porter (YNAP)
2018 Richemont acquires majority of YNAP for $3.3 billion at $5.9 billion valuation
2023 Richemont doesn’t even include YNAP in their financials and specifically excludes cash on hand and the results as they are from assets ‘Assets of disposal group held for sale’ and ‘discontinued operations’. But they do note that sales for YNAP declined 14%. And reports are they are actively engaging potential buyers.
Farfetch and YNAP seem to qualify for disastrous. Who else is in the multi-brand ecomm platform space?
2021 Hudson’s Bay Co splits Saks.com from the stores. Insight Partners invests $500 million at $2 billion valuation
2021 plans for IPO announced with a projected valuation of $6 billion
2023 Q3 GMV declines 19% YoY and slides another 8% in Q4
2024 on Apr 16 they received $60 million in needed liquidity.
MyTheresa
2021 IPO’s with a closing price of $31
2024 priced at $4.15 for 87% decline since IPO
Looks like Luca Solca has a good point. Some questions I am curious to answer:
- How much of the multi-brand online problem is selling luxury? Is the only way to sell luxury online through single brand sites? Does selling luxury online even work? Who does it well and why?
- Is the multi-brand luxury and fashion selling proposition doomed? Department stores from Saks Fifth Avenue, Neiman Marcus, Nordstrom, Macy’s, Barneys - have all struggled.
Sources and further reading:
https://www.retaildive.com/news/saks-dot-com-liquidity-pathlight-capital-bank-of-america/713307/
