Online fashion commerce platform Farfetch has acquired the group behind streetwear label Off-White as the luxury e-tailer seeks to move into design, production, and brand development.
The cash and stock deal gives New Guards Group, which has exclusive licenses for streetwear brands Off-White, Palm Angels, Marcelo Burlon County of Milan, Heron Preston, Ben Taverniti Unravel Project, Alanui, and Kirin Peggy Gou, a total enterprise value of $675 million. Farfetch has secured a €300 million bridge facility from JPMorgan to fund the deal.
The acquisition adds a “Brand Platform” layer to the Farfetch platform and extends the company’s proposition upstream by expanding its capabilities to now include design, production, and brand development. Farfetch will now be able to further leverage its existing capabilities – its global consumer base, data insights, and expansive boutique network – in combination with New Guards’ expertise in supporting designers with services including strategy development, sourcing and production, merchandising, licensing, marketing and growth planning. Equipped with this full suite of services and capabilities, Farfetch will directly support new creative talent to unlock their vision and potential, deliver superior distribution and ensure consumers are served with the best new designer labels, to enable the “Brands of the Future”.
A number of the New Guards portfolio brands were already present – though only via boutiques – on the Farfetch Marketplace, including Off-White, which is one of the top 10 most popular brands for Farfetch in terms of gross merchandise value. The acquisition provides the opportunity to develop and introduce new and highly attractive brands to the Farfetch platform, along with exclusive capsule collections and collaborations to further enrich the consumer experience and boost consumer engagement with the Farfetch brand. New Guards owns majority stakes (75 percent on average) in seven popular brands, most of which have demonstrated rapid and profitable growth within the first three years of ownership. 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.
Farfetch will leverage its existing technology, data, and logistics infrastructure to tap into near-real-time supply and demand data to match New Guards’ production in a much quicker cycle. This “connected wholesale” model will create meaningful productivity gains by minimizing overstock and strengthening distribution, which should also reduce the need for markdowns.
“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,” said José Neves, CEO and co-chair of Farfetch. “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.”
“This is what the combination of Farfetch and New Guards brings to the industry,” Neves continued. “Together, we can not only continue to develop New Guards’ current portfolio but will also be uniquely positioned to bring many new talents to life with the combined layers of the Farfetch platform. I believe this new dimension of our strategy expands and advances our vision of being the global platform for luxury, at the service of creators, curators, and consumers, united for the love of fashion.”
“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,” added Davide de Giglio, co-founder and CEO of New Guards Group. “Creative visionaries need to be empowered with best-in-class design studios, industrial capabilities, and global distribution channels. Farfetch has the technology, expertise, and vision to take our business to the next level and unleash the talent of the future.”