Farfetch will buy 100 percent of New Guards' shares for $675 million. The consideration payable by Farfetch is going to be divided equally between Farfetch shares and cash, and the exact amounts will be calculated after the customary adjustments.
“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, Farfetch. “The brands of the future will have 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.”
With Farfetch’s aim of expansion, the company’s board believes the acquisition will be good for shareholders and customers alike, as well as designers, retailers and manufacturers. The company said it wants to create the “brands of the future.”
The acquisition will add a “brand platform” component to Farfetch and allow it to develop, design and produce brands. Farfetch said it will be able to combine its global consumer base, data insights and far-reaching boutique network with New Guards’ business abilities to “directly support new creative talent to unlock their vision and potential, deliver superior distribution and ensure consumers are served with the best new designer labels.”
New Guards also own majority stakes in seven different popular brands. Farfetch said it looks forward to helping to develop and introduce the brands to new clientele.
“This is what the combination of Farfetch and New Guards brings to the industry. 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,” Neves said. “I believe this new dimension of our strategy expands and advances our vision of being the global platform for luxury, at the service of creators, curators and consumers, united for the love of fashion.”