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THE CHEAT SHEET

Farfetch‘s Pandemic Bounce

Farfetch Reports Second Quarter Results This Week | Source: Shutterstock

  • Farfetch will report second quarter financial results on Aug. 13
  • Unlike many of the brands it carries, the online luxury marketplace has seen strong sales as consumers turn to e-commerce during pandemic lockdowns
  • Farfetch has yet to make a profit; Management says it is on track to be blacked out next year

Farfetch is on the right track. The company’s stock price has more than tripled since its lockdown lows in April and is likely to report another dizzying revenue increase for the second quarter. The pandemic has created “perfect trading conditions” for the market, writes Bernstein’s Luca Solca, who has historically been skeptical of the company’s business model. Its main competitors, including luxury brands and retailers, have been put to the test by distribution issues – less of a problem for Farfetch, which usually leaves storage and shipping to third-party sellers. And because everyone shops online, acquiring customers is easier, reducing potentially one of the biggest barriers to the company’s profitability.

Still, it’s an open question whether new customers will return, and the e-commerce boom is likely to attract newcomers to an already crowded market. Like other multi-brand retailers, Farfetch will also have to work to keep the most sought after labels on its site; In recent weeks, LVMH, Burberry and other luxury brands have said they are taking steps to drive more sales through their own channels.

It comes down to: Farfetch has shown it can grow sales – now it must show it can make a profit too.

What is the next step Tapestry?

A Coach pop-up store | Source: courtesy

  • Tapestry CEO Jide Zeitlin resigned last month over allegations that he had entered an improper relationship with a woman years earlier
  • The company is on its third CEO in less than a year, and has also replaced all of its brand heads
  • Sales and profits are expected to fall sharply due to the pandemic, although the company said results should be better than initially feared

Tapestry revenues would be dramatic enough, even before the surprise resignation of the Trainer, Kate Spade and Stuart Weitzman CEO of the owner. The company had previously said its sales and profits would be better than initially expected in the last quarter, and it has $ 1.4 billion in cash available to help it deal with pandemic disruptions and carry out its turnaround. Watch this week to learn more about what that plan actually is. Zeitlin had committed to a three-year turnaround design and execution in March, replacing the heads of all three Tapestry brands.

It’s not all bad news. An argument could be made that the worst is over as stores reopen worldwide (although some have closed again in the US as new Covid-19 cases increase). Coach relies less on struggling department stores than many of its rivals. And unlike apparel-focused brands that are stuck with instantly dated spring collections, Coach and Kate Spade’s handbags are not seasonal and can be sold later, assuming handbags ever regain their pre-pandemic appeal.

It comes down to: Tapestry’s needs, from cutting discounts to boosting sales at Kate Spade, are just as urgent as two CEOs ago.

Live in front of a studio audience, it’s Copenhagen Fashion Week

Models at Ganni’s S / S 20 show in Copenhagen last August | Source: Yuliya Christensen / Getty Images

  • Copenhagen Fashion Week, which runs from August 9-12, features a mix of digital content and shows for live audiences
  • A few brands, including Valentino, Jacquemus, Etro and, last week in Shanghai, Louis Vuitton, have been staging physical shows with live audiences since the pandemic peak
  • More designers are expected to perform live shows during European fashion weeks in September

After the largely digital free for everyone in Paris and Milan last month, this week’s Copenhagen program marks the first attempt to host anything resembling a conventional fashion week. The organizers use a “no rules approach” in terms of format. A handful of the roughly 30 brands on display fully schedule live shows with an audience. However, many others are expected to include some sort of physical component along with digital videos and live streams.

Denmark has largely reopened, making the logistics of hosting fashion events easier than in venues where the pandemic is more of a threat (although audiences for shows will be limited to a few dozen, mostly local guests). The lack of international visitors is a major hurdle that designers in New York, London and beyond will likely face next month. A weak engagement with last month’s digital shows is a sign that designers still need a critical mass of celebrities, buyers and editors in the room to generate buzz and make a compelling case for Fashion Week. The battle for attention is nothing new for Copenhagen, a regional fashion week that sometimes operates in the shadow of Paris, London and Milan. Organizers say they plan for each designer to hold a Q&A, and there will be a series of lectures on sustainability, racism and other topics alongside the shows.

It comes down to: Copenhagen should not only showcase Scandinavian designers, but also agood test run for September, when major fashion capitals plan to host physical shows, presentations and events for the first time since the lockdowns.

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The Week Ahead would like to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.

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