Alibaba Group and Richemont have announced a strategic partnership with Farfetch, which will see the two companies invest £1.1bn in the luxury fashion retailer.
The partnership with the eCommerce giant, Alibaba, will provide luxury brands with enhanced access to the Chinese market as well as accelerate the digitisation of the global luxury industry, according to a statement.
British-Portuguese retailer, Farfetch, will launch luxury shopping channels on Alibaba’s platforms, Tmall Luxury Pavilion and Luxury Soho, China’s premier luxury and luxury outlet destination within the Tmall marketplace, as well as Alibaba’s cross-border marketplace Tmall Global. The new channels will expand the reach of Farfetch’s global luxury platform to Alibaba’s 757 million consumers, the company says.
As part of the global partnership, Alibaba and holding company, Richemont, will invest $600 million ($300 million each) in Farfetch Limited and $500 million ($250 million each) in Farfetch China. This means the two companies will have a combined 25 per cent stake in the new joint venture that will include Farfetch’s marketplace operations in the China region.
The investments by Alibaba and Richemont in Farfetch China and the establishment of the joint venture are expected to be completed during the first half of calendar year 2021.
Separately, Artemis – the controlling shareholder of global luxury group Kering (Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, Dodo, Qeelin, Ulysse Nardin, Girard-Perregaux, and Kering Eyewear) – has also agreed to increase its existing investment in Farfetch with a $50 million purchase of Farfetch’s Class A ordinary shares.
José Neves, Farfetch Founder, Chairman and CEO, said: “The $1.15 billion investment in Farfetch from Alibaba Group, Richemont, and Artemis is a strong validation of our position as the global platform for luxury.
The new initiatives with Alibaba Group and Richemont extend Farfetch’s strategy to power the digital transformation occurring across the luxury industry, which has been accelerated by the unprecedented challenges resulting from the COVID-19 pandemic.”
Daniel Zhang, chairman and CEO of Alibaba Group, said: “This highly complementary partnership brings together some of the world’s leading luxury retail and technology platforms, representing another milestone in Alibaba’s strategy to meet the rapidly growing demand for luxury products in China.
“By partnering with Farfetch and expanding our existing relationship with Richemont, we will accelerate the digitization of the global luxury retail industry and transform the luxury shopping experience for consumers.”
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