Alibaba, Richemont, Farfetch Link Up on Digitization of Luxury Industry, Chinese Market

By Olivia Bugault

France's Compagnie Financiere Richemont SA, London-based Farfetch Ltd. and Chinese giant Alibaba Group Holding Ltd. said that they have formed a strategic partnership to speed up the digitization of the luxury industry and improve access to the Chinese market.

Under the partnership, Alibaba and Richemont will invest $250 million each in Farfetch China, and will therefore hold a combined 25% stake in a newly formed joint venture that will include Farfetch's marketplace operations in China, they said late Thursday. Alibaba and Richemont can decide to buy a further combined 24% of Farfetch China three years after the joint venture's formation, they said.

The investments and joint venture should be completed during the course of the first half of next year.

"Alibaba and Richemont will invest $600 million ($300 million each) in private convertible notes issued by Farfetch Limited," they added.

British-Portuguese online luxury fashion-retail platform Farfetch will launch shopping channels on Alibaba's platforms. "The new channels expand the reach of Farfetch's global luxury platform to Alibaba's 757 million consumers, offering luxury brands a multi-brand solution through a single integration with Farfetch," they said.

Additionally, French holding company Artemis will increase its existing ownership in Farfetch through the purchase of about 1.9 million shares for a total gross proceeds of roughly $50 million.

Write to Olivia Bugault at olivia.bugault@wsj.com

(END) Dow Jones Newswires

November 06, 2020 02:00 ET (07:00 GMT)

Alibaba (NYSE:BABA)
Historical Stock Chart
From Mar 2024 to Apr 2024