Condé Nast seems to have walked away from its investment in Farfetch Ltd. with a nice payday and a rare win in the turbulent world of e-commerce.
“It was the opposite of a fiasco,” said one source with knowledge of the Condé numbers. “It was a terrific windfall.”
Farfetch, which as of Tuesday had a market capitalization of $5.93 billion, had gone public in the US in 2018 and in the first six months of that year had racked up losses of $71.9 million on half-year revenue of $267.5 million.
Condé Nast was reportedly growing concerned with the money Farfetch was spending on marketing, according to the Times of London, which broke the news of Condé’s exit last week.
But with an investment reportedly to be around $293 million — only a portion of that in cash — Media Ink estimates Condé Nast may have reaped more than $400 million as it walked away.
The site lets shoppers across the globe peruse goods for retailers ranging from Brown’s in London to Five Story in NYC, with Farfetch taking a 25% cut.
By June 2017, Condé Nast decided to toss in the towel on its homegrown Style.com — which had been the subject of some internal bickering for control — and merged it into Farfetch, getting another 258,000 shares of stock in the then-privately held company, which it had invested in back in 2013.
Condé Nast International Chairman Jonathan Newhouse took a seat on the board of the London based Farfetch.
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In March, Jonathan quietly resigned that seat shortly before Condé Nast erased his day job as chairman of Condé Nast International and Roger Lynch was installed as CEO of domestic and international Condé Nast.
Exactly how lucrative the deal was is a little tough to decipher, but in the August 2018 filing, Farfetch lists Condé Nast and its parent, Advance Magazine Publishers, as holding 14,838,000 shares of common stock
If Condé dumped the bulk of its shares on March 8 — the same day that Jonathan Newhouse resigned — it means Condé would have walked away with $411,469,109, since the stock closed that day at $27.73 a share. Farfetch said Condé held 5.6% of its common stock post IPO, but declined to speculate on timing of Condé’s stock sale prices. Condé Nast declined to comment. Farfetch closed at $19.77 on Tuesday, up 1.33%.