Farfetch acquisition of Off-White New Guards Groups : risk or opportunity?

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Yesterday Farfetch, the online platform that sees NET-A-PORTER founder Natalie Massenet as a non-executive co-chairman, announced the acquisition of the group owner of, among others, Virgil Abloh Off-White for 675 million $.

The 10 year old company has still not reached break even and it went public one year ago.
Investors have not been shy in judging this new move that took the shares down to more than 40% in the after-market time.
The share peaked at 29.69$ in March 2019, yesterday with the market open was at 18.25$ and it went down to 10.9$ after market closure.

The acquisition, as well as the previous ones made of Stadium Goods, a streetwear online platform, and Topline, a Chinese #luxury #ecommerce, is heavily weighing on the bottom line of the digital giant.

A bold and unusual decision against the tide as recently the trend has been about luxury groups such as Richemont buying e-commerce platform like YOOX NET-A-PORTER GROUP.

On the other side:

– is Farfetch well equipped in terms of brand strategists and brand management to drive such a complexity out of the sandpit of losses?
– is Off-White a phenomenon built to last? Will it keep Virgil Abloh on board?

Clear vision and strong management are a must.