The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Luxury e-commerce and streetwear giant Farfetch is facing a “review” by Italian tax authorities at one of its subsidiaries in the country, the company disclosed in its annual report Friday.
Farfetch’s Italian subsidiaries include New Guards Group, the luxury streetwear outfit that operates Off-White and Ambush, as well as Farfetch’s Italia division and Palm Angels, the label in which it acquired a controlling stake last November.
”Italian authorities are currently reviewing the activities of one of our subsidiaries for the years 2015 through 2020, including whether that subsidiary had a permanent establishment in Italy and our transfer pricing policies,” Farfetch said in the report.
Both New Guards Group and Palm Angels were founded in 2015. Farfetch declined to comment on which unit or units were concerned by the inquiry.
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Italian authorities have cracked down in recent years on fashion companies who allegedly reduced their taxes and social charges by paying salaries and funnelling revenues through lower-tax jurisdictions.
In 2019, Kering paid $1.5 billion in a settlement over its alleged use of a logistics centre in Ticino, Switzerland, to reduce the taxes of its flagship brand Gucci. Dolce & Gabbana faced a drawn-out court battle over payments to a Luxembourg subsidiary, while Bulgari faced an inquiry over its use of an Irish subsidiary in the years leading up to its sale to LVMH.
Kering and Tom Ford are among the brands to have ceased operations in the low-tax Swiss canton of Ticino, long dubbed “Fashion Valley.”
European governments have recently made a priority of pushing tech giants to pay more taxes locally as well.
On the heels of its first profitable year, the luxury platform is continuing on with a multi-pronged strategy to gain more market share, from a potential YNAP deal to a hundred-million-plus opportunity with Reebok.
The luxury fashion platform sees an opportunity in beauty that has eluded many others.
The deal will bolster Farfetch’s suite of white label services for industry clients as the e-commerce giant aims to ‘really own the category and the opportunity.’
Robert Williams is Luxury Editor at the Business of Fashion. He is based in Paris and drives BoF’s coverage of the dynamic luxury fashion sector.
Brian Baskin is Deputy Editor at The Business of Fashion. He is based in New York and oversees BoF's beauty, retail, direct-to-consumer, technology, marketing and workplace verticals.
Marc Bain is Technology Correspondent at The Business of Fashion. He is based in New York and drives BoF’s coverage of technology and innovation, from start-ups to Big Tech.
Fashion brands are edging in on the world’s largest gathering of design professionals and their wealthy clients, but design companies still dominate the sector, which is ripe for further consolidation, reports Imran Amed.
Blocking the deal would set a new precedent for fashion M&A in the US and leave Capri Holdings in a precarious position as it attempts to turn around its Michael Kors brand.
After preserving his fashion empire’s independence for decades, the 89 year-old designer is taking a more open stance to M&A.
The sharp fall in the yen, combined with a number of premium brands not adjusting their prices to reflect the change, has created a rare opportunity to grab luxe goods at a discount.