Farfetch and Neiman Marcus Group ink strategic global partnership
Two big names in luxury announced a “strategic partnership” on Tuesday that has both a US-specific and global angle. E-tailer Farfetch and US retailer Neiman Marcus Group (NMG) are linking up “to revolutionize integrated luxury retail”.
In practice, that means Farfetch Platform Solutions (FPS) will re-platform and power the website and mobile application of NMG’s Bergdorf Goodman brand.
Farfetch will also make a minority investment in NMG of “up to $200 million” to support digital growth and innovation initiatives.
Completion of the partnership and investment is expected by Q3, subject to the satisfaction of customary closing conditions.
This really is a big deal given Farfetch’s huge reach around the world and the fact that NMG is the largest omnichannel luxury retailer in the US.
A succession of luxury brands and retailers have spoken lately of how buoyant the high-end fashion market is in the US at present and for Farfetch, this deal will put it front and centre in that market.
For Bergdorf, it means that using FPS will “introduce its digital customer experience and curated offering to customers globally, integrating seamlessly with the iconic New York City flagship”.
With its $200 million investment, Farfetch joins existing investors including Pimco, Davidson Kempner Capital Management, and Sixth Street.
NMG will use the proceeds “to further accelerate growth and innovation through investments in technology and digital capabilities”.
Additionally, Neiman Marcus is “committed to using select FPS modules, including foundational international services. Both Bergdorf Goodman and Neiman Marcus will join Farfetch Marketplace as a partner, adding participating brands in key global geographies”.
“I believe the US luxury market is at a pivotal point,” said José Neves, Farfetch Founder, Chairman and CEO. “Whilst the US is proving to be a long-lasting source of growth for the luxury industry, fuelled by younger generations who are highly engaged with the category, 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.”
He also referred to NMG’s “stellar management team” and said the two firms “share the same unwavering vision for the future of luxury, with the customer at the centre of all we do. This partnership is about revolutionizing the luxury landscape globally”.
Meanwhile, NMG CEO Geoffroy van Raemdonck, added: “José and the entire Farfetch team have built a best-in-class technology platform and are the ideal partner to help us grow Bergdorf Goodman to be an even stronger global digital luxury retailer. Farfetch's investment demonstrates their confidence in our omnichannel strategy, and we look forward to partnering with [them].”
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