Read on TwitterHere is an EASY thread
Looking for GROWTH past $SHOP $SE $AMZN $BABA https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> Here is a marketplace for luxury FASHION https://abs.twimg.com/emoji/v2/... draggable="false" alt="💎" title="Edelstein" aria-label="Emoji: Edelstein">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete"> Growing 74% YoY with Yearly Sales of $1.4B https://abs.twimg.com/emoji/v2/... draggable="false" alt="💸" title="Geld mit Flügeln" aria-label="Emoji: Geld mit Flügeln">https://abs.twimg.com/emoji/v2/... draggable="false" alt="📱" title="Mobiltelefon" aria-label="Emoji: Mobiltelefon">It is going BIG on China https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> with $JD $TCHEY investments https://abs.twimg.com/emoji/v2/... draggable="false" alt="👟" title="Sportschuh" aria-label="Emoji: Sportschuh"> AND it now OWNS “Off-White”Here is an EASY threadhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">" title="https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer"> Looking for GROWTH past $SHOP $SE $AMZN $BABA https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> Here is a marketplace for luxury FASHION https://abs.twimg.com/emoji/v2/... draggable="false" alt="💎" title="Edelstein" aria-label="Emoji: Edelstein">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete"> Growing 74% YoY with Yearly Sales of $1.4B https://abs.twimg.com/emoji/v2/... draggable="false" alt="💸" title="Geld mit Flügeln" aria-label="Emoji: Geld mit Flügeln">https://abs.twimg.com/emoji/v2/... draggable="false" alt="📱" title="Mobiltelefon" aria-label="Emoji: Mobiltelefon">It is going BIG on China https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> with $JD $TCHEY investments https://abs.twimg.com/emoji/v2/... draggable="false" alt="👟" title="Sportschuh" aria-label="Emoji: Sportschuh"> AND it now OWNS “Off-White”Here is an EASY threadhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">" class="img-responsive" style="max-width:100%;"/>
Farftech $FTCH is a online luxury platform 
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> that connects consumers with over 1.200 luxury boutiques https://abs.twimg.com/emoji/v2/... draggable="false" alt="💎" title="Edelstein" aria-label="Emoji: Edelstein"> across the world https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌏" title="Asien-Australien auf dem Globus" aria-label="Emoji: Asien-Australien auf dem Globus">
It takes a commission (25% - 33%) on each sale (with 8% more if $FTCH handles fulfilment)https://abs.twimg.com/emoji/v2/... draggable="false" alt="💸" title="Geld mit Flügeln" aria-label="Emoji: Geld mit Flügeln"> And it doesn’t own inventory https://abs.twimg.com/emoji/v2/... draggable="false" alt="📦" title="Paket" aria-label="Emoji: Paket">
It takes a commission (25% - 33%) on each sale (with 8% more if $FTCH handles fulfilment)
It was founded in 2007 by Jose Neves https://abs.twimg.com/emoji/v2/... draggable="false" alt="👤" title="Silhouette einer Büste" aria-label="Emoji: Silhouette einer Büste"> A fashion entrepreneur also known for launching SWEAR and SIX London https://abs.twimg.com/emoji/v2/... draggable="false" alt="⚙️" title="Zahnrad" aria-label="Emoji: Zahnrad">
SIX London develops and manufactures footwearhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👟" title="Sportschuh" aria-label="Emoji: Sportschuh"> for leading luxury brands such as Comme des Garcons, JW Anderson, Hood By Air…
SIX London develops and manufactures footwear
It then distributes and sells these to over 600 luxury boutiques worldwide https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌐" title="Weltkugel mit Längengraden" aria-label="Emoji: Weltkugel mit Längengraden">
Clients include Nordstrom, Bloomingdales, Hudson Bay, Galleries Lafayette, Harvey Nichols, United Arrowshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🏬" title="Kaufhaus" aria-label="Emoji: Kaufhaus">
Clients include Nordstrom, Bloomingdales, Hudson Bay, Galleries Lafayette, Harvey Nichols, United Arrows
This valuable experience were key for $FTCH https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔑" title="Schlüssel" aria-label="Emoji: Schlüssel"> as Jose Neves wanted to offer a single portal https://abs.twimg.com/emoji/v2/... draggable="false" alt="📱" title="Mobiltelefon" aria-label="Emoji: Mobiltelefon"> for luxury buyers to shop from independent luxury boutiques across the world https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌏" title="Asien-Australien auf dem Globus" aria-label="Emoji: Asien-Australien auf dem Globus">
Jose Neves is not the only fashion veteran behind $FTCHhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> Nathalie Massenet joined ranks as well
Jose Neves is not the only fashion veteran behind $FTCH
She is the founder of Net-A-Porter which now does $ 1.4B in sales as part of the YOOX Net-A-Porter group https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏅" title="Sportmedaille" aria-label="Emoji: Sportmedaille">
So here we have 2 industry veterans https://abs.twimg.com/emoji/v2/... draggable="false" alt="👥" title="Silhouette von Büsten" aria-label="Emoji: Silhouette von Büsten"> with a solid background in both fashion https://abs.twimg.com/emoji/v2/... draggable="false" alt="👚" title="Damenbekleidung" aria-label="Emoji: Damenbekleidung">https://abs.twimg.com/emoji/v2/... draggable="false" alt="👕" title="T-Shirt" aria-label="Emoji: T-Shirt"> and technology https://abs.twimg.com/emoji/v2/... draggable="false" alt="🖥" title="Desktop-Computer" aria-label="Emoji: Desktop-Computer"> working on a luxury #eCommerce player https://abs.twimg.com/emoji/v2/... draggable="false" alt="💎" title="Edelstein" aria-label="Emoji: Edelstein">
How did that turn out? Here are some key milestoneshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
How did that turn out? Here are some key milestones
Jose Neves officially launched $FTCH on the 9th of October 2008 with just 5 employees https://abs.twimg.com/emoji/v2/... draggable="false" alt="🐣" title="Schlüpfendes Küken" aria-label="Emoji: Schlüpfendes Küken">
By 2011, it already had over 100 retailers on its platformhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend">
In 2013 it had over 240k marketplace customershttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👤" title="Silhouette einer Büste" aria-label="Emoji: Silhouette einer Büste"> and that number grew to 1 million by 2016 https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">
By 2011, it already had over 100 retailers on its platform
In 2013 it had over 240k marketplace customers
In 2017, $JD invested $ 397m in $FTCH https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> This stake now represents 16.5% of the company
By the time of its IPO in September 2018https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏦" title="Bank" aria-label="Emoji: Bank"> $FTCH sales stood at $ 267m for the first half of the year
By the time of its IPO in September 2018
But https://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen"> Do they STILL manage to GROW? https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> For Q2 ’20, revenue stood at $ 364m, coming from $ 209m a year earlier (74% YoY growth)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚨" title="Polizeiautos mit drehendem Licht" aria-label="Emoji: Polizeiautos mit drehendem Licht"> YoY revenue growth for Q1 ’20 stood at 90% , Q4 ’19 at 96% and Q3 ’19 at 90% https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚨" title="Polizeiautos mit drehendem Licht" aria-label="Emoji: Polizeiautos mit drehendem Licht">
Fair to sayhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🙌" title="Raising hands" aria-label="Emoji: Raising hands"> They manage to keep up their growth!
Fair to say
Are customers loyal?
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> $FTCH “ACCESS” loyalty program counts 2m members in Q2 ’20 (1.4m in Q1 ’20 and 1m in Q4 ’19)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> $FTCH active consumers reached 2.5m in Q2 ’20 (2.1m in Q1 ’20 and 1.4m in Q4 ’19)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📲" title="Mobiltelefon mit nach rechts zeigendem Pfeil auf der linken Seite" aria-label="Emoji: Mobiltelefon mit nach rechts zeigendem Pfeil auf der linken Seite"> App installs more than DOUBLED YoY - Potentially locking in customers LT
$FTCH takes its growth from the GLOBAL shift to online sales
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete"> Share of online luxury sales (% of total luxury sales) should reach 30% by 2025 - From 12% today and 9% in 2017
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> This is an upward revision that takes into account the effect of the pandemic (prior est. at 25%)
All in all, $FTCH is boosted by the natural shift to online sales which is further supported by 2 factors https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="1️⃣" title="Tastenkappe Ziffer 1" aria-label="Emoji: Tastenkappe Ziffer 1"> Growing appetite for luxury goods in China https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> Sales growing by 20% in 2019 https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete">
...renewed passion for in-real-life experiences), but some digital shopping habits built during the outbreak will stick—especially if brands raise their game in online assortment, user experience and digital marketing.”
Ok, so the luxury sales are growing https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> and shifting online https://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> What are $FTCH other activities?
https://abs.twimg.com/emoji/v2/... draggable="false" alt="⚙️" title="Zahnrad" aria-label="Emoji: Zahnrad"> Seller Tools https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> Logistical intelligence and key stats for shops listed on its website
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛒" title="Shopping cart" aria-label="Emoji: Shopping cart"> Store Of The Future https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> Stores filled with technology (RFID-enabled clothing racks...
...digital mirrors, connection to $FTCH platform) to improve retail productivity by capturing consumer data
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> Farfetch Black & White Solutions https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> eCommerce management, operations support, international logistics support and technical support for luxury brands - $SHOP for luxury
On this last solution, Jose Neves says the following https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
“By using our API, the brands, even on their own websites, can offer inventory from their physical stores”
“If a brand wants to sell on WeChat in China, they just need to use our API code and integrate their operations”
“By using our API, the brands, even on their own websites, can offer inventory from their physical stores”
“If a brand wants to sell on WeChat in China, they just need to use our API code and integrate their operations”
$FTCH unlocked the Chinese market through 2 investments
“As part of this relationship, Farfetch leverages $JD local logistics network, consumer payment solutions, technology capabilities, and its marketing resources, including its WeChat partnership. [...] will give us valuable insight into the Chinese market [...]”
$FTCH is playing a very smart game in China by getting investments from $JD and $TCHEY https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China">
By levering the WeChat platform (1B users) it is fully exploiting the power of sales through mobile phones in Chinahttps://abs.twimg.com/emoji/v2/... draggable="false" alt="📱" title="Mobiltelefon" aria-label="Emoji: Mobiltelefon">and playing right at the heart of changing consumer habits https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen">
By levering the WeChat platform (1B users) it is fully exploiting the power of sales through mobile phones in China
Here is what Jose Neves has to say on WeChat https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
“We have a WeChat account and a WeChat store where you can purchase all the products available on Farfetch, via WeChat. We will also launch a Mini Program very soon. So we’re fully integrated with WeChat”
“We have a WeChat account and a WeChat store where you can purchase all the products available on Farfetch, via WeChat. We will also launch a Mini Program very soon. So we’re fully integrated with WeChat”
Read all the interview right here https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> https://www.europastar.com/time-business/1004090145-farfetch-the-online-retail-giant-targets-china.html">https://www.europastar.com/time-busi...
Last stop https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> VERTICAL INTEGRATION https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete">
In August 2019, $FTCH purchased News Guard Group (NGG), Off-White’s parent companyhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👟" title="Sportschuh" aria-label="Emoji: Sportschuh">
It paid $ 675m, equally divided in cash & shareshttps://abs.twimg.com/emoji/v2/... draggable="false" alt="💸" title="Geld mit Flügeln" aria-label="Emoji: Geld mit Flügeln">
At first, the world stood in shock and the shares plunged 40%https://abs.twimg.com/emoji/v2/... draggable="false" alt="📉" title="Tabelle mit Abwärtstrend" aria-label="Emoji: Tabelle mit Abwärtstrend">
Is it all that bad?https://abs.twimg.com/emoji/v2/... draggable="false" alt="🤯" title="Explodierender Kopf" aria-label="Emoji: Explodierender Kopf">
In August 2019, $FTCH purchased News Guard Group (NGG), Off-White’s parent company
It paid $ 675m, equally divided in cash & shares
At first, the world stood in shock and the shares plunged 40%
Is it all that bad?
What first scared investors was the apparent lack of rationale https://abs.twimg.com/emoji/v2/... draggable="false" alt="💡" title="Elektrische Glühbirne" aria-label="Emoji: Elektrische Glühbirne"> for this acquisition and the pile up in debt https://abs.twimg.com/emoji/v2/... draggable="false" alt="💰" title="Geldsack" aria-label="Emoji: Geldsack">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💎" title="Edelstein" aria-label="Emoji: Edelstein"> $FTCH is an asset-light platform https://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> It should focus on its high-margins activities
Well, there is another side of the equation https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> GQ, the magazine, compared this acquisition to $NFLX producing its own shows
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📺" title="Fernsehen" aria-label="Emoji: Fernsehen"> “Stranger Things is to Netflix what whatever the next Off-White is to Farfetch.”
By the time of the acquisition https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete"> NGG was growing by 59% YoY with Gross Margins of 55%
In the 6 months following the acquisitionhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> Off-White sales on $FTCH had increased by 80% YoY
In the 6 months following the acquisition
It released the Air Jordan 4 x Off-White ‘Sail’ in July and sold out the same day https://abs.twimg.com/emoji/v2/... draggable="false" alt="🤯" title="Explodierender Kopf" aria-label="Emoji: Explodierender Kopf"> This generated 800 million hits on the Farfetch platform within the first hour https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">
$FTCH has built a considerable MOAT https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏰" title="Europäisches Schloss" aria-label="Emoji: Europäisches Schloss">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> “THE” luxury platform (taking a 25 to 33% commission) on a global scale and locking in the luxury market in China https://abs.twimg.com/emoji/v2/... draggable="false" alt="💎" title="Edelstein" aria-label="Emoji: Edelstein">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Quietly becoming the $SHOP of luxury, providing operations, logistical and development help to brands globally https://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer">
In the end it all makes sense
A quick look at their financials https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> For Q2 ’20, revenue stood at $364m, coming from $209m a year earlier (74% YoY growth)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💎" title="Edelstein" aria-label="Emoji: Edelstein"> Gross margins have stayed consistent at around 40% - 45%
Here is a review for $VRM - would love to hear your take on the matter https://abs.twimg.com/emoji/v2/... draggable="false" alt="👀" title="Augen" aria-label="Emoji: Augen">
@john__rosevear
@Ryan_Burgio
@TMFJaguar
@TMFBowman
@john__rosevear
@Ryan_Burgio
@TMFJaguar
@TMFBowman
Hope you liked this thread!
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> For more content, follow us on Twitter
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Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ Financial Times
✑ Forbes
Sources
✑ Investor presentation
✑ Company website
✑ Financial Times
✑ Forbes
✑ Business Of Fashion
✑ Retail Dive
✑ Bloomberg
✑ Europa Star
✑ GQ
✑ BCG, Bain & Company, McKinsey
✑ Jing Daily
✑ Felix Capital on Medium
✑ Fashion Network
✑ Retail Dive
✑ Bloomberg
✑ Europa Star
✑ GQ
✑ BCG, Bain & Company, McKinsey
✑ Jing Daily
✑ Felix Capital on Medium
✑ Fashion Network
