On the IPO Plans at Stitch Fix, Farfetch And Many Others

2017 is shaping up to become the year of online retail IPOs. Blue Apron already has presented its first set of numbers. The rumors are getting serious for Stitch Fix’s IPO as well. Reuters:

Stitch Fix Inc has hired investment banks for an initial public offering (IPO) that could value the U.S. personalized fashion internet retailer at between $3 billion and $4 billion, including debt, according to people familiar with the matter.

For Stitch Fix, which claims to be profitable (the company’s fundraising history backs that claim up, too), this makes a lot of sense.

In the last five years, Stitch Fix has grown to 4,000 employees. The company is operating 5 logistics centers in the US.

Stitch Fix has around 3,000 stylists who are accompanied by 75 data scientists, led by the former Netflix technology chief Eric Colson.

In three funding rounds, Stitch Fix raised $47 million, the last time was in June of 2014.

Farfetch is the next one to most likely go public as well. Sky News:

Farfetch, the British-based online luxury retailer which sells brands ranging from Alexander McQueen to Zac Posen, is advancing plans for a listing in New York that could value it at up to $5bn (£3.9bn).

This fits right in with Farfetch’s recent PR activities (the, in our eyes, doomed “Store of the Future”) and moves like getting Net-a-Porter founder Natalie Massenet to join the board of directors.

farfetch.png

We already reported on the IPOs of Boozt and Eve Sleep. In “the coming months”, we will also see Delivery Hero going public.

Big picture, this coming IPO craze is fueled also by great macro numbers. Online retail is growing. In the West, online retai still only just makes up a percentage in the low double digits, just shy above single digits. If you, like us, believe that online retail will take over the vast majority of retail, if not -depending on your definition of online- all of it1, you see tremendous growth potential before us. (and huge choke points, but that’s a different discussion)

The general market dynamics in China are lifting up both Alibaba and JD.com -no matter how good or bad they operate-, while in the US we can witness the slow but inevitable offline retail meltdown getting underway.

Not everyone will become a winner of course, but for the aggregate of online retail right now there is only way this’ll go: up.

By Jochen Krisch and Marcel Weiß

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  1. Within a few decades everything will be digital at its core. (I see this logical endpoint being approached within 20 years, 30 years max. Quite possibly even sooner. Change is accelerating -thanks to the digital realm encompassing increasingly more parts of the economy and society as a whole and thus lifting itself up faster and faster-. And soon enough, the majority of people alive will not remember a world without the Internet. Habits and defaults follow as expected.) 

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