You have #SHOP #MELI #SE #BABA and #AMZN? and believe in the shift to remote “everything”

Here is an UNKNOWN COMPANY that has gained 180% in 1 YEAR and is growing by 75%+

It is going big on China and has merged its Chinese operations with $JD

Short Thread

Farfetch $FTCH is an online luxury shop that connects buyers with over 1.300 luxury boutiques

It also offers e-commerce tools such as logistical intelligence and key stats to shops listed on its website

Its revenue comes from the sales of more than 3.000 luxury brands

For Q2 ’20, revenue stood at $364m, coming from $209m a year earlier (74% YoY growth)

Gross margins have stayed consistent at around 40% - 45%

The company currently has over $1.1B in current assets and $530m in current liabilities

Besides a 1-time write-off of $212m this quarter, all seems to go well for $FTCH

Management team has a strong track record in the fashion business and is driving $FTCH towards a profit

Key question is whether they have loyal customers and a MOAT in the luxury play

$FTCH enjoyed a COVID related boost as its active consumers reached 2.5m, up from 1.7m a year earlier

Their loyalty program has over 2m enrolled customers and app installs more than DOUBLED YoY

However, Average Order Value decreased from $600 to $493 as new customers may need some more time to spend bigger on the platform

And now the crunchy part

Luxury market has recovered since March and shares of leading luxury groups are trading near ATH

35% of the luxury spending happens in China (McKinsey est.) and $JD invested $397m in $FTCH and they have now merged their Chinese operations

By having a clear focus on luxury, $FTCH is able to use its data to boost its in-house luxury brands such as Off-White

$FTCH might thus be good play with the rise of upmarket e-commerce

Countless recessions have already shown that luxury is here to stay

And taking advantage of the rise of luxury in China with a player backed by a Chinese giant such as $JD only make sense

Hope you liked this thread!

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Here is the case for $FTCH - would love to hear your take on that!

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Sources

✑ https://www.fastcompany.com/company/farfetch

✑ https://www.ft.com/content/64649eb8-4307-11e9-b168-96a37d002cd3

✑ Investor presentation

✑ https://www.mckinsey.com/