©Seunghoon Jeong / Hypebeast

©Seunghoon Jeong / Hypebeast

Farfetch has acquired New Guards Group for a Total Enterprise Value of USD 675 million. Farfetch said the move “advances its strategy to be the global technology platform for the luxury fashion industry”. By adding a “Brand Platform” layer to Farfetch’s existing Technology, Data and Logistics Platform, New Guard will extend the company’s capabilities beyond technology solutions and global distribution into design, production and brand development

After Farfecth acquired Stadium Goods last year, the company has announced the taker-over of New Guards Group, which owns the exclusive licenses for successful labels including Off-White, Palm Angels, Marcelo Burlon County of Milan, Heron Preston, Alanui, Unravel Project and Kirin Peggy Gou, which all had a strong impact on the fashion industry in recent years. New Guards is a brand platform that has a proven track record of identifying and nurturing some of the most culturally relevant emerging brands, designers and creative directors in the sector, which will help Farfetch to elevate its brand equity.

This purchase is London-based Farfetch’s first big move into direct fashion engagement, as the platform currently solely acts as a web store for third-party brands, as opposed to in-house production and sales. 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. With this Acquisition, Farfetch will be able to further leverage its existing capabilities – its global consumer base, superior 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 to enable the “Brands of the Future”.

Farfetch defines “Brands of the Future” with the following 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.

A number of the New Guards portfolio brands were already present on the Farfetch Marketplace via individual boutiques, 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. 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 as well as promoting additional alignment with boutique sellers via their new “connected wholesale” model helping to leverage productivity gains by minimizing overstock and strengthening distribution, which should also reduce the need for markdowns.