Farfetch Gets Closer To Being The ‘Amazon of Luxury’ Through Its Richemont-YNAP Deal

Farfetch

“Farfetch has been investing in its development of a best-in-class seamless technology solution for luxury shopping. It allows for a completely seamless journey across all four ways of shopping so that the ways customers shop are matched by brands and suppliers. It provides an experience for online, offline, multibrand and monobrand at a global scale and merged into a connected experience,” said José Neves, Farfetch.

Farfetch and investors have been through a whirlwind recently. First, Farfecth announced an agreement to acquire 47.5% of Richemont’s YOOX Net-A-Porter (YNAP) online fashion group along with replatforming most of Richemont’s Maisons, including Cartier, Van Cleef & Arpels and Piaget, under Farfetch Platform Solution (FPS). Then a day later, it reported second-quarter earnings.

It’s going to take time for Farfetch to execute its long-term plan to become the global platform for luxury. Likewise, it will take time for investors to figure out what it will mean for the luxury industry over the long term.

Still, in a week when the Dow, S&P 500 and Nasdaq Composite fell some 4% overall, Farfetch stocks were up over 50%, closing the week at $12.03 after opening Monday at $7.77.

In both the YNAP acquisition and the earnings call, CEO José Neves laid out the company’s mission and luxury market vision as online’s share of the $300 billion personal luxury goods market continues to grow from its current 22% SOM, behind only monobrand stores at 32%.

“Our mission is to be the global platform for luxury,” he said. “Our vision for the evolution of luxury is one where the boundaries between the different modes of shopping [online, offline, monobrand and multibrand] have been completely dissolved, revolutionizing the shopping experience for consumers globally and elevating the human connection between the creators, curators and the consumers of luxury. We call this vision ‘Luxury New Retail (LNR).’”

Neves’ “North Star” is the “seamless convergence of luxury shopping” and he envisions Farfetch as the means to make it possible. It is a grand vision – some might say grandiose – that sounds remarkably similar to that of Jeff Bezos’ vision for Amazon back in 1997, when the company’s initial foray into selling books evolved into the “Everything Store” and much more.

Reflecting on Amazon’s explosive success, Bezos explained, “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”

Neves is deploying all three of these strategies to make Farfetch the virtual “Everything Store” of luxury, and the Richemont-YNAP deal has given it a big leap forward to realizing its vision.

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“These customers are becoming increasingly selective and show a priority for a number of brands that offer more,” says Bernard Arnault, LVMH

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5 Challenges Every Home Brand Must Overcome to Grow in the U.S. Market

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Unity Marketing | 717-336-1600 or pam@unitymarketingonline.com

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