Why did Farfetch decide to invest in Neiman Marcus ?

Online luxury goods retailer Farfetch has announced that it will invest nearly $200 million in the Neiman Marcus Group.

Farfetch‘s investment in Neiman Marcus comes as luxury groups scramble to meet strong demand for high-end fashion and accessories in the US, which emerged as the sector’s key market last year, boosted by a rapid rebound in local consumption.

The investment cements a “very strategic and deep partnership that we want between the two groups“, Farfetch CEO José Neves told Reuters in an interview, noting that it was the biggest deal for the online retailer in the US.

Farfetch Platform Solutions (FPS) will revamp and power the website and mobile app for Neiman Marcus Group’s Bergdorf Goodman brand. Farfetch will also make a minority investment in NMG of “up to $200 million (€183 million)” to support digital growth and innovation initiatives and join Neiman Marcus’ existing investors, which include PIMCO, Davidson Kempner Capital Management and Sixth Street.

The deal is a “strategic opportunity for Farfetch to differentiate itself among service providers and benefit from the strength of local US customers“, commented Bernstein analyst Luca Solca, noting that the deal represents a consolidation of the sector.

The partnership with Farfetch will allow the company to enhance the customer experience and extend its global reach : “Being on the platform allows us to go even further in how we brand the experience on [Bergdorf Goodman’s e-commerce site] and how we show the product assortment. Their architecture is the best there is,” says Geoffroy van Raemdon, CEO of the Neiman Marcus Group, tells Vogue Business.

“For Farfetch, the addition of Neiman Marcus gives them access to a physical retailer that has long had its finger on the pulse of American luxury,” said Neil Saunders, managing director of Globaldata. “It will also allow them to learn more about how consumers shop across channels – a possible prelude to further advances in physical or omnichannel retailing” .

Featured photo : © Shutterstock

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Hélène Cougot

Passionnée depuis son plus jeune âge par l’art et la mode, Hélène s’oriente vers une école de stylisme, l’Atelier Chardon-Savard à Paris, avec une option Communication. Afin d’ajouter des cordes à son arc, elle décide de compléter sa formation par un MBA en Management du Luxe et Marketing Expérientiel à l’Institut Supérieur de Gestion à Paris dont elle sort diplômée en 2020. Elle a notamment écrit des articles lifestyle et beauté pour le magazine Do it in Paris et se spécialise en rédaction d’articles concernant le luxe, l’art et la mode au sein du magazine Luxus Plus.********** [EN] Passionate about art and fashion from a young age, Hélène went to a fashion design school, Atelier Chardon-Savard in Paris, with a Communication option. In order to add more strings to her bow, she decided to complete her education with an MBA in Luxury Management and Experiential Marketing at the Institut Supérieur de Gestion in Paris from which she graduated in 2020. She has written lifestyle and beauty articles for Do it in Paris magazine and specializes in writing articles about luxury, art and fashion for Luxus Plus magazine.