The Acquisition Of Chao Off-White Jingdong's Fashion Business Farfetch Shares Collapsed.

After announcing the takeover of NewGuardsGroupHoldingSpA, Off-White's parent company, almost all investors were hopeless at the prospect of Farfetch, a luxury electric business. After the London fashion business, the stock price plunged 40% to $10.95.

In addition to having Off-White brand, Italy group NewGuardsGroup also owns many brands such as PalmAngels, MarceloBurlonCountyofMilan, HeronPreston, Alanui, UnravelProject and KirinPeggyGou.

In its statement, Farfetch claims to have added the so-called brand platform to the group, which previously served as the third party platform to provide online trading venues for boutiques and fashion brands.

The value of the transaction for NewGuardsGroup is US $675 million, which is about 12% of Farfetch's market value of 5 billion 472 million US dollars on Thursday, half of which is paid in cash, and half is paid in the form of Farfetch shares.

To this end, Farfetch and Morgan reached a $300 million financing agreement. According to the statement, in the fiscal year ended April 30, 2019, NewGuardsGroup earned $345 million and a pre tax profit of $95 million.

By the end of June 2019, in the first half of fiscal year, NewGuardsGroup revenue increased by 59% to US $190 million, gross profit margin was 55%, pre tax profit increased by 83% to US $57 million, net cash growth increased from 46% to US $48 million.

Jos e Neves, the founder and chief executive of Portuguese electric business in London, said that after having more than 650 boutiques, the brand combination of NewGuardsGroup would make the company more powerful in the industry.

NoAgency analyst Tang Xiaotang said in the evaluation of the transaction, the frequent listing of Farfetch transactions made the London electricity supplier, which was always bleeding, finally go to sell or bankruptcy. Both the luxury industry and the growth of e-commerce channels are beginning to decline.

Early last month, Cond Nast Nast, a fashion publishing giant, worried about the management of Jos e Neves, especially in terms of marketing costs. It had cleared its holdings and offered 234 million pounds, or about $293 million.

The new transaction once again shows that under the same share rights mode, Farfetch has been out of control, just as its major shareholder Jingdong board of directors, in the case of founder Liu Qiangdong, has been in a lawsuit of sexual assault, and it has nothing to do with Liu Qiangdong.

Since Off-White founder VirgilAbloh is currently the world's largest luxury brand LouisVuitton Louis Weedon menswear art director of LVMHMo tHennessyLouisVuittonSE MC.PA (MC.PA) road, it is rumoured that French giants will buy NewGuardsGroup.

VirgilAbloh, a 38 year old DJ/ fashion designer, joined LV in early 2018, and said his goal was to "think about the significance of the new stage of design and luxury to luxury brands."

Off-White, founded by VirgilAbloh, did not have any core value in the early years. It relied on the iconic "Ribbon", and began to cooperate with the world-famous brands such as Nike, Nike, JimmyChoo, Moncler alliance, SunglassHut, WarbyParker, Umbro UMBRO and Byredo. The influence of Off-WhitexNike reached a phenomenal level and swept the title of several shoe lists in 2017.

Subsequently, Off-White began to imitate Vetements, and with other brands such as the latter, with its unique street and rebel culture, impacted on the traditional conservative values of the luxury goods industry, and was finally "consigned" by the big group.

Vetements founder, DemnaGvasalia, a 38 year old German designer from Georgia, joined KeringSA Open Cloud group in 2015. He became the artistic director of Balenciaga, and created an explosive product for Balenciaga, which transformed the brand into the fastest growing brand of the group, even more than Gucci Gucci.

Off-White, such as "trend" luxury goods, and the sale of traditional luxury goods such as Balenciaga and so on, are partly due to unexpected gains in finding new customers under the growth demand of luxury goods industry. After the financial crisis, the luxury industry is entirely dependent on Chinese consumers, and the luxury and disloyalty of Chinese luxury consumers are their distinctive characteristics.

Farfetch announced its quarterly results on the same day. By the end of the two quarter of June, the London electricity supplier's net loss after tax was $89 million 623 thousand, or a loss of $0.29 per share, a sharp increase from a net loss of 17 million 681 thousand dollars a year and a loss of 0.07 US dollars per share.

After adjustment, the loss per share was $0.15, an increase of two times compared with the same period last year, which is better than FactSet's expected -0.19 dollars. During the reporting period, Farfetch revenue increased by 42.7% to 209 million 300 thousand dollars, which is also better than FactSet's expected $199 million 700 thousand.

Before buying NewGuardsGroup, Farfetch bought StadiumGoods, a shoe dealer StadiumGoods for $250 million, and merged Jingdong's independent luxury electronics platform Toplife last month. It is reported that the price is $50 million.

Before listing, Farfetch acquired AdvanceMagazinePublishersInc. and CNCommerceLtd. of Nash's two subsidiaries in Kangtai in June 13, 2017. The latter two companies mainly operate the Style.com from the T website, and the transaction price is $12 million 411 thousand. In 2015, Farfetch also bought Browns, a London buyer's shop.

As of Thursday's closing, Farfetch shares rose only 3.05% this year, which has substantially lost 17.20% of the same period in the S & P 500 index, closing at 18.25 US dollars, down 10% compared to the 20 US dollar issue price.