S&P assigns Farfetch, loan B-

S&P said it preliminarily assigned B- ratings to Farfetch Ltd. and its planned $400 million senior secured term loan. The loan’s recovery rating is 3 indicating an estimate of about 55% recovery in default.

“Farfetch, one of the largest global online platforms in the luxury fashion segment, has been expanding its revenue above the industry rate over the last decade, with compound annual growth rate of about 60% between 2015-2021. We anticipate that over the next two to three years, the group's organic growth will largely follow the growth expectations for the industry, and Farfetch will likely strengthen its competitive standing further with key partnerships, such as the recent conditional agreement with Richemont (subject to regulatory approval),” the agency said in a press release.

S&P said it projects Farfetch’s revenue growth of about 30% compound annual growth rate over the 2021-2026 forecast period.

Farfetch will use the loan to boost liquidity and for general corporate purposes.

The outlook is stable.

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