Farfetch to Pump Money and Punch Into Neiman Marcus and Bergdorf eCommerce Ops

The online luxury retail space got a big new player Tuesday (April 5), when U.K.-based Farfetch said it was investing $200 million into Neiman Marcus’ digital growth and operations, while also re-platforming the website and mobile app of the 115-year-old brand’s Bergdorf Goodman unit.

In announcing their three-way mashup, Farfetch said the deal was in line with its own digital growth and innovation initiatives and will help it expand beyond the 700 global fashion brands and designer boutiques it already sells products for, saying the tie-up comes at a pivotal point for the luxury segment that’s being fueled by highly engaged young consumers.

“Businesses will have to significantly upgrade their digital capabilities — powering both online and offline customer journeys — to meet these new customer expectations and stay ahead in what is going to be a competitive space in the coming years,” José Neves, Farfetch founder, chairman and CEO said in the press statement.

While professing his great admiration for Neiman Marcus and Bergdorf Goodman and the role they have played in shaping the high-end retail industry, Neves also clearly has his eye on what will be, rather than just what has been.

“We share the same unwavering vision for the future of luxury, with the customer at the center of all we do,” Neves said. “This partnership is about revolutionizing the luxury landscape globally, both online and offline,” he added.

A Retail Revolution

To be sure, the concept of legacy luxury retailers outsourcing digital operations is not new and was first tested last year when Saks.com was spun off as a stand-alone operation from the brand’s long-standing brick-and-mortar stores.

With that in mind, Neves said the luxury category is set to be competitive for years to come, as long as retailers can meet, and stay ahead of, the expectations of new customers.

For their part, as much as both Neiman Marcus and Bergdorf Goodman have enjoyed a multigenerational role in the industry, they have also both faced their shares of hardship and financial stress in recent years too. It’s a reality that not only precipitated their own pairing but has also prompted store closures and a shift to facilitate consumers’ growing omnichannel shopping habits.

As it stands, the release notes that Neiman and Bergdorf’s still have a team of more than 3,000 sales associates, which it says enable it to offer “an unmatched relationship with the luxury-obsessed customer.”

Partnering with Farfetch will “accelerate our e-commerce strategy, creating a seamless customer experience,” Neiman Marcus Group CEO Geoffroy van Raemdonck said in the joint statement, in which he called Farfetch, and its best-in-class technology, “the ideal partner.”

In fact, the Neiman chief went as far as equating the Farfetch investment and partnership as an endorsement of the company’s omnichannel strategy, saying he looked forward to continuing to revolutionize the luxury customer experience.

Farfetch in Freefall

Although shares of Farfetch have been listed and trading in the U.S. since 2018, the fact that its stock has fallen 75% over the past 13 months from a pandemic-era peak cannot be ignored and is also a likely catalyst for today’s deal. With its market value approaching $6 billion, down from a high of close to $30 billion, Farfetch itself was in need of a shakeup.

“This is a significant digital transformation opportunity that will allow us to unlock massive value for Neiman Marcus Group, its shareholders and its customers, who will now be able to shop from wherever they are in the world,” said Farfetch Chief Platform Officer Kelly Kowal.

The deal is slated to close by the third quarter in time for the peak holiday season rush.