Farfetch supplements tech platform with $675m New Guards takeover

Online fashion marketplace and technology provider Farfetch has announced the acquisition of New Guards Group, a design, production and distribution platform for luxury brands.

It is a move the company describes as supporting its strategy to be a global technology platform for the luxury fashion industry. Following the completition of the $675 million deal, Farfetch will have new design, production and brand development capabilities to add to its existing marketplace, data insights and eCommerce technology portfolio that already supports a wide range of independent and world renowned brands.

With the New Guards addition, Farfetch talked up its newfound ability to power the “brands of the future”, continuing the blurring of the lines between retail and brands that has increased at speed in the digital era.

New Guards holds exclusive licences for labels including Off-White, Palm Angels, Marcelo Burlon County of Milan, Heron Preston, Alanui, Unravel Project and Kirin Peggy Gou. Farfetch said it has a proven track record of identifying and nurturing some culturally relevant emerging brands, designers and creative directors in the luxury sector.

The acquired business provides the resources and expertise to transform early stage brands into profitable, high growth businesses, which in turn helps drive rapid, profitable growth for New Guards itself.

Off-White is one of the New Guards brands already present on the Farfetch online marketplace, and its boutique ‘store’ is one of the top ten most popular brands for Farfetch in terms of gross merchandise value (GMV).

José Neves, CEO and co-chair of Farfetch, commented: “The addition of New Guards’ brand platform brings a creative and industrial dimension to our suite of capabilities which, combined with our community of more than 650 boutiques, enables us to power and promote both new and existing creative names in the luxury industry to build the brands of the future.”

He listed the three core elements of the future brands as: a “creative tastemaker” able to leverage digital channels to engage a global community; best-in-class design, planning and manufacturing; and direct-to-consumer global online distribution, supported by a “connected wholesale presence” in prestigious physical boutiques.

“This is what the combination of Farfetch and New Guards brings to the industry,” he added.

News of the acquisition came as Farfetch announced its second quarter results, showing platform GMV of $484 million – an increase of 44% year on year. Farfetch's own revenue jumped from $146.7 million in Q2 last year to $209.3 million.

Shares in the company nosedived almost 30% off the back of the results, though, with the company reporting a loss after tax of almost $90 million compared to a loss of $17.7 million this time last year.

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