Update August 9, 2019 [9:49 a.m. ET]: Following the recent acquisition, Off-White ™ issued an official statement clarifying how the brand will function in the future. “OFF-WHITE LLC, which is controlled by Virgil Abloh, owns the trademark of our brand, and NGG is our exclusive licensee under a multi-year agreement. The New Guards Group transaction with Farfetch will not affect the day-to-day operations of Off-White ™, as the New Guards Group team will be part of Farfetch. We look forward to our ongoing work together. ”
So it's safe to say that Off-White ™ you know and love will remain unchanged.
You can read our original story below.
Online retailer Farfetch has acquired New Guards Group in a deal that grants the Italian manufacturing and holding company that licenses Off-White ™, Palm Angels and Heron Preston at a company value of $ 675 million. According to the announcement, New Guards Group co-founder Davide De Giglio will remain on board as CEO, with Andrea Grilli continuing as commercial manager.
Responding to the news, Farfetch founder, co-chairman and CEO José Neves said: “The brands of the future will have three core elements: first, a creative taster who can leverage digital channels to engage a global community; other, best-in-class design, planning and manufacturing; and the third direct to consumer global online distribution, supplemented by a connected wholesale presence in the most prestigious physical stores.
“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 teams on the Farfetch platform. ”
News of the deal has not been a hit with investors, but with Farfetch's shares on the New York Stock Exchange, which fell about 45 percent from $ 1
Milan-based New Guards Group is said to have an average of 75 percent of its portfolio of brands, with De Giglio and co-founder Claudio Antonioli owning 46 percent of the New Garde group. The company's revenues increased 59 percent from the previous year in the first half of 2019, with gross profit margin up 55 percent. In the year ended April 30, New Guards generated pre-tax profits of $ 95 million, with revenue of $ 345 million.
Founded in 2015 by De Giglio, Antonioli and Marcelo Burlon, New Guards Group has been at the forefront of streetwear's rise in the world of luxury fashion for men. What ownership of an e-commerce company will mean for its brand of stables remains to be seen, although Farfetch hopes the acquisition can help with their own business fortunes.
Farfetch has struggled for profitability and is not expected to break even before tax until 2021. Results in the first two quarters of this year showed a loss after tax of $ 109 million and $ 89 million, respectively, with revenue in the second quarter increasing by 43 percent compared to 2018 to $ 209 million.
Farfetch is expected to pay $ 675 million to New Guards Group in cash and shares. The agreement is expected to end in the third quarter of 2019.
Business of Fashion