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Browns Acquired by Farfetch as Part of Omni-Channel Growth Strategy

BoF has learned that online marketplace Farfetch has acquired London boutique Browns to develop and test new retail and omni-channel strategies.
Browns | Source:
  • Kate Abnett

LONDON, United Kingdom — Farfetch, the multibrand online fashion retailer, announced today that it has acquired London boutique Browns for an undisclosed amount.

Browns will be run independently from the Farfetch business and led by Holli Rogers, former fashion director of Net-a-Porter, who is joining Browns in the role of CEO. Mrs Joan Burstein, the boutique's founder, will be appointed honorary chairman and her children, Simon and Caroline Burstein, will remain as advisors to the business and members of its board of directors.

The company plans to develop and test new innovations in omni-channel retail technology at Browns, before rolling them out across the online platform's full network of over 300 boutiques. The move is part of Farfetch's omni-channel growth strategy, which, according to José Neves, who founded the company in 2007, is driven by one question: "How will people shop for luxury fashion in five or ten years?"

Fashion is not downloadable. Physical experience will be key to the future of fashion.

“The answer is not going to be purely online,” Mr Neves told BoF. “I always say, ‘Fashion is not downloadable.’ Physical experience will be important and key to the future of fashion… We had to be able to iterate and demonstrate this vision in one iconic retailer, just to be able to innovate fast enough. It was clear that we wouldn’t get there without having this fantastic showcase that Browns is now going to be for us.”

Founded in 1970 by Joan Burstein — widely known as 'Mrs B' — the prestigious London boutique has consistently championed young design talent including John Galliano, whose graduate collection Burnstein bought in its entirety and displayed in the store's window, and Comme des Garçons, which Browns stocked as early as 1981.

“Since I moved to London as a designer in 1996, Browns was always this one independent retailer which symbolises the best of the best luxury shopping and retail,” said Neves. “This is not about changing the DNA of Browns. On the contrary. It is a big strategic move from Browns’ perspective. How can we move what is a fantastic brand and DNA into the next decade and future-proof it?”

“Browns has had a very successful business with Farfetch for the past two years, but more than that we have developed a huge respect for Jose Neves and his team, not only what they have achieved, but the way in which they operate,” Simon Burstein told BoF. “Farfetch has played a huge role in supporting independent retailers and bringing new talent to market. Similarly, the search for creativity, innovation and originality is fundamental to the Browns spirit, so we share many common values.”

Browns launched e-commerce in the late 2000s, but the online business makes up only 25 percent of the company's total revenue, Simon Burstein told BoF in December of last year. Indeed, Browns' digital platform has not scaled like those of other independent boutiques, such as MyTheresa, Luisa Via Roma and MatchesFashion. In 2012, Browns partnered with Farfetch, which, according to Neves, opened up new markets for the boutique, including Brazil, China, Japan, Russia and Korea.

Farfetch connects local boutiques with a global audience, using the platform’s scale to secure economies of scale in logistics and thereby enabling small brick-and-mortar boutiques to compete with major online retail players. According to Neves, Farfetch currently represents over 35 percent of the sales by brands on its platform.

“Browns has always been forward-thinking; we launched the website relatively early and have always recognised the importance and power of omni-channel shopping,” said Mr Burstein. “As such, as we reviewed our longer term objectives and growth strategy, we felt it was the right time for the business to make the next step in its evolution.”

In recent years, omni-channel has emerged as a major buzzword in retail, with digitally native brands such as Nasty Gal, Bonobos and Warby Parker all recently launching physical stores. With its model of digitizing inventory found in physical stores, Farfetch is well positioned to lead the charge towards omni-channel retail. But it does not have the answers yet. “The overall vision will be developed over years — not months — and will be agile and iterative, mixing technology we build at Farfetch with technology we integrate from third parties,” said Neves.

Neves’ own career has shifted between physical and digital retail. In the early 2000s, the Portugese entrepreneur ran B-Store, a multibrand footwear store on London’s Savile Row, for which he received a British Fashion Award for ‘Retailer of the Year’ in 2006. Having shifted that focus to the online space with Farfetch, the partnership with Browns somewhat brings him full circle back to physical retail.

“If you deeply understand the consumer, you know that’s the way you shop for fashion. No one shops purely online or purely offline,” said Neves. “Physical experiences won’t go away, but the physical store as we know it won’t exist in five years’ time. Without a strong digital platform they won’t be able to survive. These two worlds that were once divided are now united.”

This is the first time that Farfetch will own a physical store and, according to Neves, the company has no plans to acquire other physical boutiques, or launch more stores under the Browns brand.

Still, Farfetch has big ambitions for omni-channel. Fuelled by its last fundraising round in March, which raised $86 million and valued the company at $1 billion, it has set up a new division called ‘Store of the Future’ to drive its omni-channel strategy. Helmed by managing director Sandrine Devaux, previously multichannel director of Harvey Nichols, the unit will function as a sort of laboratory, with Browns as its petri dish — a place to develop and test new ideas and innovations — before rolling out these ideas across the global Farfetch network of stores, a total of 1,000,000 square feet of retail space across 30 countries.

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