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A shoemaker turns billionaire with luxury goods IPO

2018-09-21T162355Z_1275880677_RC1B38DF55C0_RTRMADP_3_FARFETCH-IPO-LUXURY.JPG
The founder of online luxury goods hub Farfetch has bagged a billion-dollar fortune.

[LONDON] The founder of online luxury goods hub Farfetch has bagged a billion-dollar fortune.

Shares of the London-based company closed at US$28.45 on Friday after the firm's initial public offering in New York the previous day. Jose Neves, 44, owns 14.8 per cent of Farfetch, according to a prospectus, valuing his stake at as much as US$1.2 billion.

Farfetch raised US$885 million in Thursday's initial public offering (IPO), selling shares above the company's marketed range of US$17 to US$19 each.

Farfetch's website helps global, deep-pocketed shoppers get their hands on high-end goods such as an US$8,287 leopard-print coat or US$980 sneakers. The company also offers services that help sellers create content for online boutiques, manage product returns and analyse consumer data to determine pricing and inventory.

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In February, Mr Neves told Bloomberg TV that Farfetch didn't have any IPO plans. Seven months later, the company registered with US regulators for the public sale of its Class A shares.

Fashion Billionaires

Mr Neves joins France's Bernard Arnault, chairman of LVMH Moet Hennessy Louis Vuitton, and Spain's Zara founder Amancio Ortega as self-made fashion industry billionaires.

Like its Milan-based rival Yoox Net-A-Porter Group, Farfetch has helped to shake up luxury fashion through focusing on e-commerce in an industry previously dominated by retailers with brick-and-mortar stores. This year, Swiss luxury goods company Richemont acquired YNAP for US$3.3 billion.

A Portuguese native, Mr Neves set up Farfetch in 2007. His interest in fashion and computer software stems from the family's shoemaking past and his receiving a computer for Christmas when he was 8 years old, Mr Neves said in a letter included in the prospectus. Before creating Farfetch, he set up sneaker brand Swear, which re-launched last year.

"The idea of an unrivaled, inclusive, inspiring destination where the whole world of fashion would meet – creators, curators and consumers, all united for the love of fashion – was the vision that is at the heart of Farfetch today," Mr Neves said in the letter. "This 10-year journey, which started in the middle of a global financial crisis, was far from easy!"

Mr Neves owns all of Farfetch's Class B stock through an Isle of Man holding company. He didn't sell any shares in the IPO. His stake is convertible to Class A shares, according to the prospectus.

A spokesman for Mr Neves declined to comment.

BLOOMBERG