José Neves helped breathe new life into multibrand fashion retailers worldwide with Farfetch. Can he do the same with department stores?
In a first for both, Harvey Nichols and Farfetch are joining as part of the department store’s aim to reach and serve a wider international audience and Farfetch’s goal to become the global platform for luxury.
Farfetch said the multiyear e-commerce partnership will allow customers to shop Harvey Nichols and accelerate the retailer’s digital strategy. Harvey Nichols will tap into Farfetch’s e-commerce and logistics platform and introduce services such as in-store returns and same-day deliveries.
Harvey Nichols will launch on Farfetch in the second half of the year, and the companies said they plan to explore additional retail and technology initiatives in the U.K. and internationally.
José Neves, founder and chief executive officer of Farfetch, said the deal marks the debut of a department store strategy for his company and he and his team are already talking to other stores. The conversations, he said, are going on in multiple countries and geographies, but he’s not disclosing any concrete plans now.
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“Department stores are amazing curators of fashion, and our mission is to be the platform for the best creators and curators. It was always part of our evolution to selectively bring department stores on board,” he said. “We started with boutiques, which remain a core part of our DNA, and in 2015, we expanded to brands selling directly on the platform. We now have over 300. For us, it’s all about being the platform for the luxury industry at a global level.”
Natalie Massenet, co-chairwoman of the board of Farfetch, called the deal a “strategic milestone” for both companies. “Farfetch is proving it is truly the technology platform for the whole luxury fashion industry,” she said, with boutiques, designers, luxury brands and department stores.
Dickson Poon, chairman and owner of Harvey Nichols, said he’s thinking about the Farfetch relationship in the long term. He said Harvey Nichols is committed to embracing “cutting-edge digital technology to create a model of the future,” adding that he wanted to work with Farfetch “given its clear expertise in digital. We look forward to exploring where we can take this partnership in years to come.”
Neves described Farfetch’s department store strategy as a win-win. “We open the platform to some of the best curators of fashion in the world and give our consumers access to these products. They have access to global audiences 24/7.” He said Farfetch chose Harvey Nichols first because “we wanted to do it with a company that had a great DNA. It’s one of the most iconic department stores in the world — and definitely in the U.K.”
He added that most department stores, despite their heritage, reputation and curatorial talents, are largely dependent on customers in one region. “It is very hard for a company to have the ability to operate in markets such as China, Japan, Korea, Latin America, Russia and the Middle East. These markets represent over half of the sales of the luxury industry globally, and we have developed capabilities in those places. We have teams on the ground, we operate in 11 languages — soon to be 12 with the launch of Arabic.”
Another advantage for department stores joining the platform is exposure to millions of millennial luxury customers with an average age of 36, Neves said.
Although Harvey Nichols was the first major U.K. store to create a mobile app for its customer loyalty program, it’s not a digitally native retailer, which is most likely why Farfetch’s offer of worldwide exposure, rapid delivery services and tech and data tools was so attractive.
Harvey Nichols, founded in 1831, is the latest European heritage brand to partner with Farfetch this year. Last month, Chanel (which doesn’t even sell online) revealed it had taken a stake in Farfetch and formed a partnership with the platform to deliver a better and more targeted customer experience.
In the interview, Neves stressed the Chanel project was not a consultancy but an “innovation partnership deal” aimed at transforming the iconic French brand’s online and off-line retail experience for customers, in particular digitally driven millennials. The multiyear, exclusive partnership involves investment from Chanel and Farfetch, and the digital solutions Farfetch is developing for the fashion house will be fully customized.
Farfetch employs around 1,000 engineers, one-tenth of whom are working in the Store of the Future unit, which aims to fuse the online and offline worlds using data to enhance the customer journey, drive personalized customer experiences and tailor technology solutions to each brand, city and store.
A few days before Chanel’s announcement, Burberry said it was teaming with Farfetch to strengthen its e-commerce presence worldwide. That partnership will see Burberry’s entire global inventory made available through Farfetch.
Harvey Nichols is the latest retailer to plug into the Farfetch e-commerce colossus. In January, the Dubai, United Arab Emirates-based Chalhoub Group inked a venture with the platform that will see the latter launch in Arabic in the first half of this year and give Farfetch’s Middle East customers curated goods for local tastes and more personalized VIP services.
As reported, the Chalhoub Group’s concept stores will be linked with Farfetch as partner boutiques. The first to join the platform will be Level Shoes, along with Level Kids and Tryano, giving those concepts a wider global audience.
It’s been a year of big deals for Farfetch, and while they may each be different, Neves said they fit into one overarching strategy. “I think if you look at all of these partnerships, they are about one single thing, which is to become the global platform for luxury.” He said Chalhoub speaks to Farfetch’s global presence, while Chanel is about platform development, and “Burberry is really about integrating one of the most digital and savvy brands onto our platform and exploring their capabilities.”
It’s no surprise that the big banks are salivating at the thought of taking Farfetch public soon, with the first reports of a potential $5 billion initial public offering in New York emerging last summer on Sky News. Rumors about Farfetch meeting with bankers continue to make the rounds, especially given the sale last year of Matchesfashion.com to Apax Partners in a reported $1 billion deal and Compagnie Financière Richemont’s surprise offer for the 51 percent of Yoox Net-a-Porter Group it does not already own, a deal that should be completed over the next few months.
Though eager, those hopeful Farfetch bankers may have to wait a bit longer. Asked about plans for an IPO and meetings with banks, Neves declined to comment.