NEW YORK, Oct. 20, 2023 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against Farfetch Limited (“Farfetch” or the “Company”) (NYSE: FTCH) and certain officers. The class action, filed in the United States District Court for the District of Maryland, Southern Division, and docketed under 23-cv-02857, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Farfetch securities between March 9, 2023 and August 17, 2023, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired Farfetch securities during the Class Period, you have until December 19, 2023 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Farfetch, together with its subsidiaries, operates a global platform for the luxury fashion industry. In addition to revenue, one of Farfetch’s most important financial metrics is gross merchandise value (“GMV”), which the Company defines as the total dollar value of orders processed, inclusive of product value, shipping, and duty, and net of returns, value added taxes, and cancellations. According to Farfetch, the Company’s GMV closely correlates with its revenue.
Farfetch’s largest markets include, inter alia, the United States (“U.S.”) and the People’s Republic of China (“China”). Despite recent softness in those markets, the Company assured investors during the Class Period that, as of the first quarter (“Q1”) of 2023, those markets had either recovered or were recovering and were expected to drive future revenue and GMV growth, particularly in the second quarter (“Q2”) of 2023.
In May 2023, Farfetch announced the commercial launch of its European partnership with footwear and clothing brand Reebok International Limited (“Reebok”). Reebok’s owner, Authentic Brands Group, partnered with Farfetch in 2022 to operate its business in Europe, re-platform its European e-commerce sites, and drive the evolution of the brand by expanding its luxury collaboration offerings globally.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Farfetch was experiencing a significant slowdown in growth in the U.S. and China; (ii) Farfetch also faced onboarding challenges impacting the launch of its Reebok partnership; (iii) Farfetch downplayed challenges it faced with respect to, and/or overstated its ability to manage, its supply chain and inventory; (iv) all the foregoing was having a significant negative impact on Farfetch’s revenue and GMV growth; (v) accordingly, Farfetch was unlikely to meet market expectations for its Q2 2023 financial results or its own FY 2023 revenue guidance; and (vi) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On August 17, 2023, Farfetch issued a press release announcing its Q2 2023 financial results. Among other items, Farfetch reported revenue of approximately $572 million, significantly less than the market consensus of $650.71 million. Farfetch also issued an FY 2023 revenue forecast of approximately $2.5 billion, compared to the average analyst estimate of $2.8 billion and the Company’s prior FY 2023 revenue forecast of $2.9 billion.
That same day, Farfetch held a conference call with investors and analysts to discuss the Company’s Q2 2023 results. During that call, Company management disclosed that significant slowdowns in growth in the U.S. and China, onboarding challenges affecting the launch of the Reebok partnership, and issues with inventory and shipping had negatively impacted Farfetch’s revenue and GMV for the quarter, as well forced the Company to rein in expectations for FY 2023.
Then, on August 18, 2023, media outlets reported that multiple analysts had downgraded Farfetch based on its poor Q2 2023 results and disappointing guidance for FY 2023.
Following these developments, Farfetch’s Class A ordinary share price fell $2.15 per share, or 45.17%, to close at $2.61 per share on August 18, 2023.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980
