Alibaba, Farfectch invest $1.1b in online fashion platform Richemont
Investors are taking a 25% stake in a JV that will run Farfetch's China store.
Alibaba and Swiss luxury goods business Richemont are investing a total of $600m in private convertible notes issued by fashion e-commerce platform Farfetch and another $500m in Farfetch China, according to a press release.
Alibaba Group and Richemont each agreed to buy $300m of the 0% convertible senior notes due 2030 issued by Farfetch. This will be used for Farfetch’s long-term strategy and facilitate the company’s growth plans.
The sale of the Notes to Alibaba Group and Richemont is expected to settle on 17 November. In conjunction, Alibaba Group will nominate one director to the Farfetch Board.
The two investors are also taking a combined 25% stake in a new joint venture that will include Farfetch’s marketplace operations in the China region. In addition, Alibaba and Richemont can purchase a further combined 24% of Farfetch China after the third year of the joint venture’s formation.
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 2021.
Farfetch will launch luxury shopping channels on Alibaba’s platforms, Tmall Luxury Pavilion and Luxury Soho, as well as in Tmall Global.
Photo courtesy of Thomas Lombard, designed by HASSELL (architects) (Wikimedia Commons)