Farfetch Limited (NYSE:FTCH) Q2 2023 Earnings Call Transcript

This is a brand that hasn’t done anything really in the premium space. So it’s greenfield and is greenfield for 2024 and beyond. And NGG with Cristiano having been over 20 years at Nike in their premium luxury, Nike collaboration department and now over three years at NGG, he’s the right guy to really make Reebok make sneaker history here. And therefore, we remain very confident over the long-term plans for NGG and for the brand platform. And we’re going to navigate this very short-term in the case of Reebok, one-off transition issues from Adidas and in the case of Off-White Palm Angels and other brands really a wholesale headwind, which we were always — we always say that the future of the brands is more direct-to-consumer than wholesale.

So our focus is really on ongoing direct consumer precisely because wholesale always has these movements of overshooting in one direction and another. So this continues to be the strategic direction for the group. On YNAP, I can absolutely confirm the share price has — and the share count has been fixed. So we don’t have any extra dilution and it’s around 11% of dilution for Farfetch for 47.5% of share capital at YNAP, that’s what’s been — that’s what’s on the deal, and that’s what’s going to be executed independently of where the share price is as soon as we get regulatory approval. And of course, you have other guardrails in this transaction in terms of the ability to — the option to require the remaining of the company over five years with the requirement for the company to be profitable for full consolidation in terms of a [indiscernible] year and five.

So those strong guardrails absolutely remain in place. We think this is a great partnership, and we’re very excited with launching — replatforming, not just [indiscernible] but also cartier.com which are going to be the two first launches where the teams are working around the clock, building these great new platforms for these flagship brands. And after that, we’ll continue with the rest of the Richemont and YNAP portfolios which, obviously, this time next year means that Farfetch — the Farfetch platform will power the largest online destination in luxury, that’s Farfetch. The second largest online destination in luxury, that’s YNAP, one of the three largest luxury conglomerates in the world that’s Richemont and two of the most iconic luxury department stores in the U.S. and Europe as Harrods and Bergdorf Goodman.

So this is an incredible roster of clients for best-in-class luxury SaaS platform and that’s what we’re excited to be delivering against.

Elliot Jordan: Thanks, everybody. That’s time on the call. So we’ll have to wrap up there. Thanks for joining the call and it’s a pleasure to hand over to Tim, who will be with Jose next time. So for me, it’s good evening, good afternoon, and good night.