Highlighting Farfetch

Not Farfetched - luxury clothing retailer returns 328.58% for the Global Shares Fund.

Investors in the Elevation Capital Global Shares Fund owned shares in Farfetch Limited [FTCH.NYSE], an online luxury clothing marketplace that connects iconic brands including Richemont, Givenchy and boutique Australasian designers such as Maggie Marilyn (NZ) and Aje (AUS), to consumers globally.

On 5 November 2020, Farfetch, Alibaba Group, Richemont (both also holdings in the Elevation Capital Global Shares Fund) and Artémis (the parent of Kering) announced a global strategic partnership to provide luxury brands with enhanced access to the Chinese market place. This partnership was the catalyst for Farfetch to experience a rapid re-rating of +153.62% in Q4 2020.

We identified the potential for Farfetch to disrupt the fashion industry when we first acquired shares in February 2021 post a disappointing IPO and the subsequent acquisition of New Guards Group (owner of Offwhite and Opening Ceremony) which the market didn’t appreciate at the time.

Given the rapid appreciation in Farfetch’s stock price it has now surpassed our appraisal of intrinsic value and we divested generating a +328.52% return for fund investors.

Farfetch now resides on our long-term watchlists awaiting “Mr. Market” to present us with an opportunity to potentially reacquire this truly disruptive company at a discount to intrinsic value once again.