, which exclusively licenses designer Virgil Abloh's hot Off-White brand, for $675 million—adding to the company's recent spending spree and perhaps putting profitability off even further.
Virgil Abloh and model Gigi Hadid after the Off-White Menswear Spring Summer 2020 runway show in Paris, France. Gross merchandise value reached $484 million, and revenue was $209 million, improving on Q1's $174 million and topping estimates. But Farfetch isn't expected to break even until 2021, Ed Yruma, managing director at KeyBanc Capital Markets, wrote in June.
The New Guards Group deal follows the acquisitions of Stadium Goods, in December, and Topline, in February, for a combined $300 million. Analysts saw those purchases as necessary spending to keep the company's GMV growing and believe they will start to pay off as the luxury industry prepares to make a belated shift online.
Those two brands may carry other benefits for Farfetch. Stadium Goods, a streetwear-focused marketplace, provides an entry into the fast-growing sneaker segment, as well as reselling, another retail craze that investors are betting on. Farfetch opened its flagship store on JD.com , the Chinese e-commerce giant that sold off Topline and remains one of Farfetch's largest shareholders. That move opens up the London-based company to 3 million Chinese consumers—“almost twice the size of Farfetch’s current active consumer base” in China, according to Marvin Fong, an analyst at BTIG—on a platform they were already familiar with.
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