Richemont’s brands include Cartier. Farfetch is based in London. The troika of companies is trying to take advantage of the continuing expansion of China’s luxury- goods market.
Alibaba said it would include Farfetch shopping channels on its Tmall Luxury Pavilion and Luxury Soho e-commerce sites.
Alibaba shares have been reeling since China’s government on Monday decided to nix the $34 billion initial public offering of Alibaba’s payments unit, Ant Group.
Why Chinese officials made the move is unclear, but analysts speculate it stemmed from Alibaba Founder Jack Ma’s lack of fealty to Chinese government policy.
Alibaba shares recently traded at $289.70, up 0.7%. They’d gained 36% year to date through Thursday.
Farfetch shares at last check traded at $42.28, up 12%. They had well more than tripled year to date through Thursday.
The Nasdaq Composite index gained 33% year to date through Thursday.
Morningstar analyst Dan Baker remains enthusiastic about Alibaba following its earnings report Thursday.
“While wide-moat Alibaba reported a mixed result for its September quarter, we believe its long-term thesis and outlook remain intact,” he wrote in a commentary Friday.
“There was some softness in new retail and direct sales revenue as well as new mobile monthly active users. However, we believe structural trends are still in good shape.”
Baker puts fair value for Alibaba stock at $296. That’s 2% above the recent level at which Alibaba traded.