Farfetch has acquired OFF-WHITE, Palm Angels and Heron Preston
The e-commerce giant continues his venture in the streetwear world with the acquisition of the New Guards Group
Fashion
August 9th, 2019
August 9th, 2019
The news came in yesterday night. Farfetch, the luxury e-tailer, has officially acquired the Milan-based New Guards Group for $675 million USD. The group controls exclusive licenses of brands with the likes of OFF-WHITE, Heron Preston, Marcelo Burlon, Palm Angels and County of Milan.
Farfetch will help New Guards’ existing and future portfolio brands maximize their potential by opening new e-Concessions on the Farfetch Marketplace, and will power each brand’s own e-Commerce site and digital platforms through its Farfetch Platform Solutions capabilities.
The British company commented with these words on the new agreement, which provides for an exchange of cash and shares, explaining that this action is "part of a strategy to be the global technology platform for the luxury fashion industry."
Josè Neves, CEO of Farfetch, explained that the joint venture with NGG will bring great benefits to the discovery and development of new talents:
The brands of the future will have three core elements. First, a creative tastemaker able to leverage digital channels to engage a global community; second, best-in-class design, planning and manufacturing; and third, direct-to-consumer global online distribution, complemented by a connected wholesale presence in the most prestigious physical boutiques.
Davide de Giglio, co-founder and CEO of New Guards Group, shares Neves' optimistic viewpoint:
We started New Guards Group because we had a vision to build a platform that could support the best creative talent in the world and build iconic brands. Farfetch has the technology, expertise and vision to take our business to the next level and unleash the talent of the future.
Farfetch uses Off-White as an example to explain what this will actually mean. The creature of Virgil Abloh (who will remain the head of the company) is currently one of Farfetch's top 10 brands in terms of Gross Merchandise Value, but it's only available on the site through Farfetch's boutique partners and the vast majority of its sales come from wholesale. Farfetch's plan is to soon introduce and power a new Offwhite.com on the platform, matching supply and demand in near real-time, by leveraging its connections with over 650 retailers. A strategy that should improve both sales and profit margins, while also reducing the risk of unsold goods.
It's not the first time either that the luxury group decides to make a move in the streetwear industry: last December it had acquired Stadium Goods for $250 million USD. According to insisting rumours, the luxury group LVMH had already attempted a similar operation with the NGG back in January, but it had underestimated the value of the NGG group to $420 million USD.
With this deal Farfetch will furthermore reinforce its power within the streetwear world, starting to talk directly to the Z Generation and to a whole new marketplace.
