John McPheters & Jed Stiller | Source: Courtesy
The article first appeared on the Business of Fashion.
LONDON, United Kingdom — In its first major move since going public in September, Farfetch announced Wednesday that it is acquiring sneaker and streetwear marketplace Stadium Goods in a deal that values the business at $250 million. The London-based fashion e-commerce platform is aiming to extend its reach in the growing luxury sneakers and streetwear market, as millennials account for a growing percentage of luxury sales and competitors are engaged in a digital land grab.
Farfetch first partnered with Stadium Goods, a consignment reseller of rare and limited edition products, on a distribution deal in April of 2018, bringing a small selection of products sold on Stadium Goods to the Farfetch platform. After the deal closes, Stadium Goods’s full inventory will be available to Farfetch users. Stadium Goods will continue to operate independently while tapping into Farfetch’s logistics and delivery capabilities.
The world's largest fashion e-commerce players, including Farfetch, MatchesFashion and Richemont’s Yoox Net-a-Porter, are locked in a race to add new services and technologies through investments, acquisitions and internal research and development in order to stay ahead of the pack, generate higher margins and become the go-to platform for consumers and brands, according to BoF and McKinsey's The State of Fashion 2019 report.
They’re all chasing a rapidly expanding online luxury market, which Bain & Co. sees growing from an estimated €26 billion ($30 billion) in 2018 to between €80 billion and €91 billion ($90.9 billion to $103 billion) in 2025. Sneakers are a key driver of the boom, outpacing overall luxury sales growth to reach $4 billion last year.
Farfetch founder and chief executive Jose Neves said that while his marketplace has built a following around high-end streetwear, “we did not have access to the rare sneakers, to the premium limited editions in the secondary market” that Stadium Goods Offers. The partnership has so far generated “phenomenal, immediate traction” from all of Farfetch’s markets, especially China, Japan, Russia and the Middle East.
“[Sneakers] are growing faster than other categories and we see the same on Farfetch,” added Neves. “We now have the strongest secondary market brand, in our view.” Stadium Goods competes directly with other streetwear-focused platforms StockX, Grailed and GOAT.
Stadium Goods co-founder and chief executive John McPheters said Farfetch’s international reach would be a major boost to the business. “They’ve figured out a lot of things that we are still learning,” he said. McPheters and co-founder Jed Stiller first met Neves a year ago and began the conversation that led to the deal.
Read the full article on the Business of Fashion.