Farfetch has announced their acquisition of Italian production and distribution company New Guards Group. The publicly traded e-commerce platform will now leverage a 'brand platform', which will allow them to expand its capabilities into design, production, and brand development. Farfetch will offer their digital data and resources to the brands represented by New Guards Group in a collaborative effort to create rapid growth for businesses and enable "brands of the future."
The $675 million acquisition will now see Farfetch become the parent company of New Guards Group's brands, which include: Off-White c/o Virgil Abloh, Heron Preston, Marcelo Burlon County of Milan, Palm Angels, Kirin by Peggy Gou, A New Application, Unravel Project, and Alanui. In a financial review of the past 12 months, New Guards Group's revenue was reported at $345 million, which Farfetch believes make it a strong investment. Having been founded in only 2015, New Guards Group saw rapid growth developing young brands into international leaders in sales and popularity within the fashion industry.
'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. '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."
After the news broke of the acquisition, Farfetch shares plunged 40%, marking an all-time low for the e-commerce retailer, who has been faced with a steadily declining share price for the past six months. However, revenue continues to increase year-on-year, recently reporting a second-quarter revenue of $209.3 million. With the new acquisition of New Guards Group, Farfetch hopes to expand its business and strengthen its hold on the fashion supply chain.