Farfetch has acquired New Guards Group, the firm that operates luxury streetwear brand Off White, for $675 million (£556 million) amid widening losses in its second quarter.
The deal means Farfetch now has a stable of directly-owned fashion fashion brands that it can launch on its online marketplace platform. New Guards Group is a Milan-based holding company founded in 2015 that has launched a handful of luxury streetwear brands, including Off-White, Palm Angels and Heron Preston.
Off White is best known for being founded and led by Virgil Abloh, who is also the artistic director for Louis Vuitton. In the UK, Off White trades with consumers directly via its own website and through concessions at Harrods, Selfridges and Harvey Nichols. Farfetch acquired New Guards in a cash-and-stock deal, with the $675 million price tag being twice the group’s annual revenue and seven times its earnings before taxes. The deal is expected to close in the third quarter of 2019.
Farfetch said it plans to grow the New Guards brands’ distribution through directly-operated retail stores and directly-operated ecommerce sites. New Guards co-founder Davide De Giglio will remain in the role of chief executive, and Andrea Grilli will stay on as chief commercial officer. The news sent shares in Farfetch plunging by 40 per cent in after-hours trading in New York, marking an all-time low for the London-headquartered retailer.
