Farfetch Ltd. filed its initial public offering on the New York Stock Exchange a year ago, and much has changed for the former Wall Street darling.
On Thursday, the luxury platform saw its stock drop 4.8% to close at a record low of $8.89 a share — just one day before its first anniversary as a public company.
It marked the latest sign of investors’ growing doubts about the company’s business model at a time when high acquisition costs and spending on tech infrastructure contributed to wider-than-expected second-quarter losses for Farfetch.
Last month, it was rumored that the online marketplace planned to snap up the recently bankrupt Barneys New York. A Farfetch spokesperson denied those claims, which sent its stock up that day.
Speculation over Barneys’ purchase came less than three weeks after Farfetch acquired Off-White parent New Guards Group for $675 million. After the announcement, Farfetch shares fell more than 40% during Aug. 8’s extended trading session, and shares fell nearly 50% the following day.
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During the company’s second-quarter conference call, CEO and co-chair Jose Neves attempted to calm Wall Street’s nerves, describing the New Guards investment as an addition to a portfolio of what he called “brands of the future.”
By skewing more toward direct-to-consumer business, Neves said he expected higher organic traffic and stronger brand adjacency — a strategy that experts say has worked for luxury platforms. The company continues to face heavy competition from fellow high-end third-party retailers, such as Net-a-Porter and MatchesFashion.com.
Farfetch has also taken a leap into brick-and-mortar companies, buying fellow London-based Browns in 2015 and picking up Stadium Goods in December — moves that have given the firm a portal into the burgeoning luxury streetwear scene.
At Friday’s open, the company’s shares were up 0.45% to $8.93.
A Farfetch spokesperson declined to comment on its stock movement ahead of its one-year IPO anniversary.
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