Farfetch to Acquire Violet Grey; Shares Rise

Online luxury fashion retail platform Farfetch Limited (NYSE: FTCH) has inked a deal to acquire luxury beauty retailer, Violet Grey.

The deal comes ahead of the launch of the company’s broader Beauty proposition, Beauty on the Farfetch Marketplace, which is scheduled for launch later this year.

The financial terms of the deal have been kept under wraps. Shares of the company gained 2.5% during the pre-market trading session on January 28, following the news.

Benefits of the Deal

Violet Grey is a popular e-commerce beauty company focused on makeup recommendations, reviews, and information. Violet Grey founder, Cassandra Grey is well-known in the beauty industry with an incredible, intuitive understanding of the world of beauty.

The addition of Violet Grey’s industry expertise will enable Farfetch to offer a curated selection of products on the Farfetch Marketplace, and lead to an expansion of its global customer base.

Further, Violet Grey will drive its standalone business, which includes VioletGrey.com and its Los Angeles retail store, by leveraging Farfetch Platform Solutions’ expertise in technology, global logistics, and operations.

Moreover, Cassandra Grey will become a global advisor for Beauty on the Farfetch Marketplace and the Co-founder of NGG Beauty. Further, Grey will also be Chair of Violet Grey.

Deal to Boost “Beauty on the Farfetch Marketplace”

The addition of Violet Grey and Cassandra Grey will also enhance Farfetch’s beauty proposition, which is due to launch later this year, and will allow customers to gain insights and expertise from multiple beauty experts and communities.

Farfetch’s expansion into Beauty aims to tap the global Luxury Beauty market, estimated to be around $69 billion, and the second-largest category within the global Personal Luxury market, after Leather Goods and ahead of the Apparel segment. The acquisition is subject to certain regulatory approvals.

Analysts Recommendation

On January 26, Cowen analyst Oliver Chen decreased the price target on Farfetch to $30 (56.9% upside potential) from $42 and reiterated a Buy rating on the stock.

Consensus among analysts is a Strong Buy based on 9 Buys and 3 Holds. The average Farfetch price target of $47.63 implies 149.11% upside potential to current levels.

Bloggers Weigh In

TipRanks data shows that financial blogger opinions are 100% Bullish on FTCH stock, compared to a sector average of 69%.

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