Farfetch shocked Wall Street in August when it bought New Guards Group, which holds the license for Off-White and is also responsible for Heron Preston and Palm Angels.
Those names might all be hot, but many investors were inclined to see the deal as a $675 million step away from Farfetch’s roots.
The Farfetch investors fell in love with when it went public in 2018 was a platform, one that connected buyers and sellers online and got a piece of the action — a business model that promised big growth without big costs and therefore big profits. With New Guards, the company seemed to be inching toward the very old-school business of making apparel, inventory risk and all.
But founder and chief executive officer José Neves stood his ground and, after punishing few months in the stock market, told WWD in November that New Guards would help make Farfetch something like the Netflix of fashion.
Netflix might have started off as a system to deliver movies and TV shows, but it has expanded into becoming a production powerhouse. Similarly, Farfetch is now making its own content.
“These things take time to settle, for people to digest them,” Neves told WWD. “We’re very, very excited with the acquisition. New Guards is a platform. They use common infrastructure and a comment model and modus operandi to launch a portfolio.”
Last year, New Guards launched Peggy Gou’s line with Kirin.
Neves said the Korean DJ brings not just a big global following, but “a very strong aesthetic.”
“You will see more of this type of launch,” Neves said. “There is a pipeline obviously. The new brands that we will be adding will be primarily available only on Farfetch and our boutiques.”
Collectively, the New Guards brands outsell any single brand on the platform and Neves said the business will continue to churn out new names.
Farfetch’s future might well be shaped by just how well that content resonates with shoppers.