Online retailer Farfetch.com is on many consumers list of where to get the latest drops from their favorite designers. Today news released that the company has acquired New Guards Group, an Italian production and holding company to top high-end streetwear brands like Off-White™, Palm Angels, and Heron Preston. The new purchase holds an enterprise value of $675 million dollars, the pretty penny Farfetch is expected to shell out for the new conglomerate. New Guards Group co-founder Davide De Giglio will continue to serve on the board as chief executive, along with Andrea Grilli remaining chief commercial officer.
In a statement released by Farfetch, founder, co-chairman, and CEO José Neves stated, “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.” Neves continued, “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.”
The move is strategic for Farfetch as they’ve been struggling for profitability as their first two quarters reflected after-tax losses of $109 Million, respectively. New Guards Group, which was found in 2015 by De Giglio, Antonioli, and Marcelo Burlon, has seen a prevalent rise in the world of luxury menswear owning 75 percent of their high profile catalogue. Although on black and white the new venture looks amazing, the stock market didn’t take very well to the release of the purchase. Within the hour, Farfetch shares on the New York Stock Exchange fell 45 percent to $10.10 from $18.25. Farfetch isn’t expected to break even on the $675 Million dollar splurge until 2021.