London-based Farfetch retailer got roughed up on the stock market yesterday (August 8, 2019) with its stock price dropping as much as 41 percent in response to disappointing second-quarter earnings results.
Investors also balked at the news the company had spent $675 million to purchase Milanese company New Guards Group, a holding company that produces Off-White, Heron Preston, Kirin and Palm Angels among others. NGG has been on a growth tear posting revenue of $345 million for for the 12 months ending April 30, 2019 with profits of $95 million before tax during the same period.
Adding to the negatives, investors were put off by news the company’s COO, Andrew Robb, is stepping down after nine years with the company.
Dismissing the disappointing results, company CEO and founder José Neves breezily stated, “Farfetch continued to deliver market-leading growth in second quarter 2019, with Platform GMV expanding 44-percent to a record $484 million, or approximately 49-percent growth on a constant currency basis. Our unmatched proposition for luxury consumers drove growth beyond not only our expectations, but also the growth of the online personal luxury goods industry, as we continued to gain market share.”
Founded in 2007, Farfetch is an online retail platform that sells products from more than 700 boutiques and brands globally. The company listed on the New York Stock Exchange under the ticker FTCH in September 2018. In December 2018, Farfetch acquired online sneaker platform, Stadium Goods, for $250 million.