LONDON — Stadium Goods, the sneaker and streetwear marketplace founded in 2015, could soon have the world at its feet under new owner Farfetch, which wants to transform it into a global destination and grab a share of the $70 billion-plus premium sportswear market.
On Wednesday, Farfetch revealed the purchase of 100 percent of Stadium Goods in a deal with an enterprise value of $250 million. Farfetch bought out Jed Stiller and John McPheters, who cofounded the company, and LVMH Luxury Ventures, which took a minority stake earlier this year.
Stadium Goods, which specializes in new merchandise, deadstock and special edition, re-sale goods, will become a Farfetch subsidiary, tapping into its technology, logistics, supply, brand and marketing resources. Stiller and McPheters will continue to run the company, which has not only built a marketplace, but also communities on social media, and in the real world.
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The brand’s downtown New York store has two separate entrances, one for sellers and one for customers, and is frequently used for Complex’s popular Sneaker Shopping series that tracks celebrities on shopping trips. In China, Stadium Goods has a Mandarin language site and works with local Chinese talent on weekly live broadcasts.
“I think Stadium Goods has huge, huge potential as a global brand, as a global destination for streetwear,” José Neves, founder, chief executive officer and co-chairman of Farfetch, said in a joint telephone interview with McPheters.
“What John and Jed have managed to build is a super strong brand with a great community. Look at the engagement that they have on Instagram, at the store on Howard Street and at the quality of the content that they create. I think this is an incredible opportunity in a growing market inside and outside the U.S. We’re just scratching the surface, really,” the ceo added.
Neves said he plans to enable the founders’ ambitions, putting Farfetch’s firepower behind the platform and trumpeting its message worldwide. He declined to put a number on how big Stadium Goods could get. In return, Farfetch said it would get “a supply of a high-demand product category, and benefit from Stadium Goods’ significant brand authority.”
McPheters said international expansion is “a huge part of our future. We are a little over three years old at this point, but international has been a huge strategy for us. We have gone really hard after China, after different layers of international growth and omnichannel growth.”
He said Stadium Goods sold to Farfetch because “it’s the strongest name in luxury, it is sprawling and has tackled some really exciting markets. That was a big drive for us.”
McPheters said he was looking forward to plugging into Farfetch’s cross-border logistics, technology, scale and customer base. “José and his team share a similar outlook for the future of fashion and retail, and together we believe the countless synergies and perfect cultural fit will make this a match made in heaven,” he said.
Melania Grippo, luxury goods analyst at Exane BNP Paribas, wrote in a flash comment following the announcement that the acquisition is “complementary to Farfetch, which already sells streetwear.” She added that the “take rate of Stadium Goods is high because of the level of service provided.”
Defying skeptics who would argue the sneaker bubble is about to burst, Grippo said “streetwear and sneakers are one of the fastest-growing segments of the luxury market,” and referenced the bank’s New Luxury report, published earlier this year.
Stadium Goods carries brands including Supreme, Palace, Adidas and Nike, with sales having grown 125 percent between 2017 and 2018. The founders told WWD last month that they are looking at implementing more gamification in the U.S. shopping experience and creating more content for women.
Stadium Goods’ storytelling strategies — and international ambitions — jibe with those of Farfetch, which works with more than 1,000 boutiques and brands and delivers to customers in 190 countries.
Over the past few months, Farfetch has boosted Burberry’s e-commerce reach to 150 countries from 45, and fortified its presence in China with the purchase of CuriosityChina, a company that works alongside luxury and fashion brands to enhance their presence in the local market via Chinese social platforms and other digital marketing initiatives.
Farfetch and Stadium Goods had already connected earlier this year, with the latter selling a selection of its inventory on Farfetch’s new sneaker hub, a specific collection that targeted Farfetch’s luxury consumer base.
“Sneakers have grown in popularity over the past few years and they have become one of the best-selling categories for men on Farfetch,” Neves said in April when the hub launched. “They have become a staple of nearly every fashion consumer’s closet as they can be paired with almost any look. The endless variety of sneakers fits seamlessly into the Farfetch marketplace model.”
The Stadium Goods purchase also recalls Neves’ roots in the fashion business: Early on in his career, Neves came up with a hybrid sneaker brand called Swear, featuring sporty lace-ups that were picked up and popularized by bands including White Stripes and The Strokes. Customizable versions of the shoes are being sold on Farfetch.
This is the first acquisition that Farfetch has made since its blockbuster initial public offering in September on the New York Stock Exchange. It won’t be the last, according to Neves, who in the past has snapped up businesses including the London luxury retailer Browns and CuriosityChina.
“Our philosophy hasn’t changed – not at all. We always said we were going to look at opportunities on a case-by-case basis, as a private company or as a public company, in new geographies or very interesting categories where we see fast growth and great brands that we feel we can help develop. I don’t think anything has changed,” he said.
Farfetch pointed out that Stadium Goods merchandise is part of the fast-growing premium sportswear market estimated to be worth $70 billion in 2017, according to a variety of sources, and Farfetch said the acquisition would be largely incremental to its existing addressable market.
Farfetch is buying Stadium Goods with cash and shares, with the exact amounts still to be determined, the company said.
Stadium Goods’ inventory will be fully integrated into and available on the Farfetch marketplace, across all geographies including the U.S. McPheters said that getting its catalogue live on Farfetch is a “huge priority, so we are definitely going to focus on that.”
Stadium Goods holds inventory, something that distinguishes the business from its competitors. The founders believe it builds trust with consumers because the product is authenticated prior to being listed, and it allows them to deliver product in as little as one business day.
In addition to the online marketplace, the brick-and-mortar store at 47 Howard Street in Manhattan, and the neighboring SG Market Center at 305 Canal Street the company also boasts iOS and Android enabled apps and third-party outlets including Farfetch, Alibaba, Amazon, eBay and more.
Asked about the overlap between the streetwear customer and the luxury one, McPheters said the lines are getting fuzzier.
“Luxury buyers are definitely interested in the same products that we sell on Stadium Goods. We sell very premium luxury streetwear, and the worlds have come together very well. The lines have blurred: Virgil Abloh is doing design for LVMH and there is a lot of cross-pollination. The premium quality and the audience remain consistent. It is something that we will continue to see.”