Online luxury fashion retail platform FARFETCH Limited (FTCH) recently revealed that it has acquired a resale platform, LUXCLUSIF. The financial terms of the deal have been kept under wraps.
Following the news, shares of the company declined 2.8% to close at $34.98 in Thursday’s trading session, but this can be attributed to wider market concerns.
Implications of the Deal
The acquisition of LUXCLUSIF will enable FARFETCH to become one of the foremost platforms for pre-owned luxury for both customers and industry partners.
Post the buyout, the LUXCLUSIF team will operate FARFETCH’s Second Life platform service, integrating both existing and new partners into the program.
The Chief Commercial and Sustainability Officer of FARFETCH, Giorgio Belloli, said, “LUXCLUSIF joining the FARFETCH group allows us to expand the company’s pre-owned offer for our customers, for brand and retail partners and for other suppliers of pre-owned products. We aim to become the leading global platform for pre-owned luxury.”
On December 9, Bernstein analyst Luca Solca reiterated a Hold rating on the stock. The analyst, however, lowered the price target from $42 to $40.50, which implies upside potential of 15.8% from current levels.
The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 10 Buys, 3 Holds and 1 Sell. The average FARFETCH price target of $49.54 implies that the stock has upside potential of 41.6% from current levels. Shares have declined about 41.9% over the past year.
According to the tool, the FARFETCH website recorded a 24.50% monthly fall in global visits in November, compared to the same period last year. Further, year-to-date, website traffic declined 2.26%, compared to the previous year.