The Week Ahead: More Richemont-Farfetch Developments; Singles Day at a Crossroads

Peak Singles Day?

Alibaba’s shopping holiday, which kicked off in late October and builds to an all-out frenzy on Nov. 11, combines the everyday deals appeal of Amazon Prime Day with the “these brands never go on sale” cachet of the Nordstrom Anniversary Sale. Or it used to, anyway. Singles Day has lost a bit of its oomph in recent years. After hitting a record $84.5 billion in gross merchandise value on its platforms in 2021, Alibaba didn’t release sales data last year.

That slump was partly due to toned-down promotions amid government pressure to avoid conspicuous consumption, a campaign that has eased off this year. A bigger threat is the migration of young customers to Douyin. The short video platform has built a livestream shopping empire that is changing the way its users shop in ways that owner ByteDance could only dream for TikTok. Alibaba offers plenty of live shopping as well, and is playing hardball with brands, threatening to yank them from its marketplace should it be discovered they’re offering better deals elsewhere, according to Reuters.

High-pressure tactics might help, but ultimately the success of Singles Day comes down to the strength of China’s economy, which remains in post-Covid limbo. Pinduoduo said sales are up, but customers are buying more “practical” items in step with uncertain times.

For Western brands, Singles Day remains one of the biggest opportunities to sell to Chinese consumers. But even there, the outlook is hazy: early reports indicate Chinese brands are climbing the ranks of top Singles Day sellers, with Proya beating out L’Oréal and Lancôme in the opening hours of Tmall’s presale, for instance.

Richemont-Farfetch: What Are They Waiting For?

When UK regulators finally approved Microsoft’s acquisition of the gaming studio Activision last month, the two companies moved within hours to finalise the deal. We’re coming up on two weeks since EU regulators gave the green light for Richemont to sell a 47.5 percent stake in Yoox Net-a-Porter to Farfetch, and it’s been radio silence.

Though much smaller than Microsoft-Activision in dollar terms, Richemont-Farfetch is far more complex. YNAP will be run jointly for several years, and Richemont is partnering with Farfetch in other ways as part of the transaction. Farfetch’s fortunes have changed dramatically for the worse since the deal was announced, potentially requiring some adjustments to how things play out.

An update could come at any time. But Richemont executives will presumably speak to the matter when the company releases its quarterly results on Friday. One subject to address is the size of the writedown Richemont expects to take on its e-commerce adventure. Richemont agreed to accept a stake in Farfetch in exchange for a big chunk of YNAP; once worth $440 million, it’s now set to receive shares worth less than $100 million. A more long-term question is how Richemont can get rid of the rest of YNAP: the original plan was for Farfetch to buy out its new partners in a few years after turning Net-a-Porter profitable. But if Farfetch’s problems worsen, will Richemont have to put in yet more money to save the deal?

The whole point of this deal is to remove YNAP from Richemont’s balance sheet. But as Bernstein analysts put it recently, “it will remain a drag on Richemont’s share price until they alleviate investor concerns on how far they are willing to go to help their new partner.”

What Else to Watch for This Week


CFDA Awards in New York


Watches of Switzerland reports results


Tod’s, Adidas, Pandora, Under Armour, Ralph Lauren report results


Capri, Coupang, Tapestry, Hanesbrands report results


Richemont earnings


Singles Day (China)

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