By Robb M. Stewart
Farfetch shares jumped Friday after it struck a global partnership with Alibaba Group and Compagnie Financiere Richemont SA as part of a $1.15 billion investment in the fashion retail-platform.
In morning trading, the stock was 14% higher at $42.99, extending the year-to-date rally.
In a move unveiled Thursday, Alibaba will launch Farfetch shopping channels on its Tmall Luxury Pavilion and Luxury Soho marketplaces.
Chinese giant Alibaba and Swiss luxury company Richemont will each invest $300 million in private convertible notes issued by Farfetch, and $250 million apiece in a new joint venture that will include Farfetch's marketplace operations in the China region. The pair will buy a further combined 24% in Farfetch China after the third year of the venture's formation, and said they will seek additional opportunities to work with Farfetch to provide services to luxury brands.
Separately, Artemis, the controlling shareholder of global Luxury group Kering, agreed to increase its existing investment in Farfetch with a $50 million purchase of Farfetch's class A shares.
With the investment, Alibaba will nominate one director to Farfetch's board.
On Friday, Wells Fargo raised its recommendation on Farfetch's shares to equal-weight from underweight, with a target of $42 a share.
Write to Robb M. Stewart at firstname.lastname@example.org
(END) Dow Jones Newswires