Farfetch will invest up to 200 million USD in Neiman Marcus Group (NMG) to create a new phygital alliance. What does that mean? The retailer will strengthen its e-commerce activities by joining the platform. Meanwhile, Bergdorf Goodman (which is part of NMG), will shift its site and online applications on Farfetch to use the latter’s technologies. The objective in the long-term is to increase sales and revenue.
New phygital alliance
The online luxury market is living a phase of consolidation, and Farfetch is doing the same as top player in the segment. The online platform continues to “talk” with YNAP, while it continues negotiations with other brands that, after NMG, could join the while label offering. This deal with Neiman Marcus, should be completed by the 3rd quarter of 2022.
The advantages for Farfetch
Farfetch controls New Guards Group, Stadium Goods and Violet Grey. The deal with NMG will bring a particular advantage to the platform in the USA, where thanks to the retail points owned by NMG, it will be able to connect with consumers offline as well. Bernstein analyst Luca Solca called the agreement “a strategic opportunity for Farfetch to differentiate itself among suppliers of services and benefit from the strength of local US consumers”, according to Business of Fashion.
And those for NMG
The partnership could be the solution to the need to increase online sales at a global level. It will also give NMG the chance to “taste” a licensing-based business model and see how it can contribute to the high-end segment. The group needs oxygen, as since the pandemic, it filed for Chapter 11 to protect itself from bankruptcy and rid itself of 5 billion of debt.