Durban – Richemont shares surged more than 11% on the JSE on Friday after the Swiss luxury goods company announced a global strategic $1.1-billion (R17.14 billion) partnership with Alibaba and Farfetch to accelerate the digitisation of the luxury goods industry.
Richemont said the companies were joining forces to provide luxury brands with enhanced access to the Chinese market, as well as accelerate the digitisation of the global luxury goods industry.
Alibaba and Richemont would each invest $300 million in private convertible notes issued by Farfetch. That would be followed by another investment of $500million by both Alibaba and Richemont, $250m in Farfetch China by taking a combined 25% stake in a new joint venture (JV) that will include Farfetch’s marketplace operations in the China region.
Farfetch will launch luxury shopping channels on Alibaba’s platforms, Tmall Luxury Pavilion and Luxury Soho, and Farfetch will expand their reach to Alibaba’s 757 million consumers.
Richemont chairperson Johan Rupert said these developments represented a further meaningful acceleration of their journey towards luxury new retail by building on their successful JV with Alibaba.
“This initiative brings together a powerful combination of highly complementary strengths, notably with our Maisons’ luxury retail expertise and Yoox Net-A-Porter’s (YNAP’s) deep brand partnerships, expert curation and exceptional customer care, that will help us deliver a seamless omnichannel experience to our discerning clientele,” said Rupert.
