Why E-Commerce Disruptors Are Trading Like Brick-and-Mortar Dinosaurs

E-commerce is on sale. Online commerce companies including ThredUp, Rent the Runway, Stitch Fix and Farfetch have seen their valuations tumble, putting them in the same ballpark as aging brick-and-mortar giants like Macy’s and Nordstrom. Already South Korea’s internet search giant, Naver, has taken advantage of the collapse to snap up Poshmark. Which of the other stocks is worth betting on—and which should investors avoid?

Some stocks in this group are holding up slightly better than their peers, showing where investors are likely the most optimistic about acquisitions or the benefit of partnerships. One example is 1stDibs, a furniture-focused seller with a market capitalization of $240 million that’s already said it’s working with bankers on options that could include selling itself. The market valuation of Farfetch, a U.K.-based luxury goods web retailer, has also held up relatively well—likely due to investor optimism about a partnership struck in August with rival luxury goods seller Richemont.

Another bet—albeit one that’s less fashionable with investors—could be Stitch Fix, the cheapest of the bunch. It has been losing customers lately after it fumbled its attempt to branch out beyond selling boxes of stylist-picked clothes and accessories. As a competitor in the new-clothing arena—unlike used apparel sellers like ThredUp and Poshmark—Stitch Fix is going up against Amazon and established retailers such as Nordstrom. But Stitch Fix has a better history of making money, unlike the other e-commerce stocks. And given its niche position, Stitch Fix could be an acquisition target at current prices.