Luxury online retailer Farfetch has just acquired New Guards Group (NGG) – the Italian contemporary fashion company for HK$5.3 billion (US$675 million).
The fashion deal intends to add a “brand platform” layer to the company and build a “brand of the future” while “expanding its capabilities to now include design, production and brand development” explains a spokesperson for Farfetch. By acquiring NGG, Farfetch will be able to provide the opportunity to develop and introduce new labels and exclusive capsule collections with its existing portfolio including Off-White, Marcelo Burlon: County of Milan, Palm Angels, Ben Taverniti, Unravel Project, Heron Preston, Alanui and Kirin Peggy Guo.
“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. “
Shortly after the news of the acquisition, founder of streetwear brand Off-White and artistic director of Louis Vuitton Virgil Abloh made a statement to clarify the effects of the deal to his brand. “Off-White would like to clarify our ownership structure. Off-White LLC, which is controlled by Virgil Abloh, owns the trademark of our brand, and NGG is our exclusive licensee pursuant to a multiyear agreement. The New Guards Group transaction with Farfetch will not affect Off-Whit’s day-to-day operations as the New Guards Group team will become part of Farfetch. We look forward to our ongoing work together,” explains Abloh.
But since the change of ownership, it has been reported that the Farfetch stock has nosedived 45 percent at US$10.09 after the news broke out, including the announcing of chief operating officer Andrew Robb leaving the company. Farfetch founder José Neves has already suffered a loss since acquiring Stadium Goods, but is hopeful that purchasing these two companies will reclaim their company value as it is currently far from profitable.