With $20 Million of New Investment Led by Condé Nast, Farfetch Pursues Multi-Channel Vision

On the heels of a new $20 million round of funding led by publishing powerhouse Condé Nast, Farfetch founder José Neves talks to BoF about his multi-channel vision for the curated fashion marketplace.

Piece D'Anarchive | Source: Farfetch.com

LONDON, United Kingdom — Today, curated fashion marketplace Farfetch.com, which connects consumers with carefully selected product from a diverse network of over 250 independent boutiques across the world, announced a new $20 million round of funding led by the international division of publishing powerhouse Condé Nast, with participation from existing investors Advent Venture Partners, Index Ventures and e.ventures. The investment comes as the interconnectedness of the web continues to power new business models that integrate editorial content and e-commerce, offering consumers a more seamless path from inspiration to transaction, and allowing retailers and publishers alike to tap new revenue streams.

While there are no immediate plans to integrate Farfetch’s e-commerce platform with Condé Nast’s fashion titles, the potential for future synergies is clear. “The rationale of investment wasn’t an immediate synergy between the companies. It’s a financial investment,” Farfetch founder José Neves told BoF. “Having said that, I think it’s quite clear that the worlds of e-commerce and media and social media are converging. And no one has found the formula yet.”

“You have amazing e-commerce websites with impeccable content, but they are e-commerce websites; they don’t have the authoritative voice of Vogue, Vanity Fair and other titles,” he continued. “Then, there are amazing magazines attracting tens of millions of readers. But their forays into e-commerce haven’t worked, at least in a way that has a meaningful impact on their balance sheets. With Condé Nast, we have a chance to think about it long-term, and try to potentially find the formula.”

The move is Condé Nast International’s third investment in European e-commerce in less than a month, following investments via the company’s German subsidiary in jewellery and fashion e-tailers ReneSim and Monoqi. “The investment forms part of a wider Condé Nast strategy, backing digital businesses which cleverly use technology to offer our large community of print and digital readers, and advertising clients, something new and valuable,” president of Condé Nast International Digital, James Bilefield, told BoF. “We remain focused on our core business of publishing… yet we also seek to extend our brands into related areas, such as events, education and e-commerce, in which technology combines with our relationships and know-how to enable our closer participation.”

For now, the injection of new funding will allow Farfetch — which attracts over 4.3 million visits per month and has over 150,000 customers in 140 countries, who spend an average of $638 per order — to fuel expansion in global markets. “In terms of our strategic priorities, first we have international expansion,” said Neves, who added that Farfetch was focusing on Japan, Australia, South Korea, Hong Kong and China, as well as South America, particuarly Brazil, where the company is growing rapidly.

But Farfetch’s long-term goal, Neves revealed to BoF, is to leverage its global network of over 250 boutiques, with a combined total of over 750 outlets, to connect physical and digital shopping experiences in new ways. “There’s a big push that we want to make into multi-channel, which is our big vision for Farfetch,” he said, describing a scenario in which a consumer could use Farfetch on a physical shopping trip, scanning nearby stores in realtime for relevant inventory. “It’s us helping footfall in the store and eventually, we believe, there’s the flow on the other side, because the customer will want to follow this store online.”

On top of this physical-digital network of stores, Neves sees opportunity to layer on a number of new services. For example, by walking into any given store, consumers could interface with any of the stores across the entire Farfetch network to try things on, transact, exchange and return. “Imagine that you buy something [online] from a store in Los Angeles and can collect it here in Paris during Fashion Week. You pass by the store, pick it up, try it on right there and, then, if you’re not happy with it, the store will take care of returns,” he said. “That’s the big shift in our platform. That’s what we want to power towards the end of this year, beginning of next.”

For the moment, this kind of service can only be delivered by well-funded mono-brand stores, which lack the diverse product assortment of Farfetch. Even large multi-brand department stores, while rich in product variety, lack the geographical coverage of Farfetch’s global network of stores.

“In terms of real high-end luxury, multi-channel can only be delivered by a network of independent luxury retailers,” continued Neves. “We have thousands of locations that are not only pick-up sites; many times they are in historical buildings, with special interior decorations and a very high level of service experience. It’s not that you just go to pick up a parcel. It’s the whole experience that will be luxurious.”