When was the last time you felt truly inspired by a luxury brand’s website? Regardless of the cute little illustrations or achingly cool ad campaign flipping past, mono-luxury e-tail hasn’t really moved on over the past decade. It’s as though they still feel the brand is enough.
People don’t dress like this, and just to replicate the physical store online is to create a glorified warehouse or catalogue, which doesn’t take into account the element of personality, pampering and leisure which makes physical shopping a pleasure for many and the reason most people desire these brands in the first place. It’s not seductive.
Left - Celine.com - Have mono-luxury sites moved on in the last decade?
During this same time period, multi-brand luxury retailers such as matchesfashion.com, Far Fetch and Net-A-Porter have grown their turnovers into the hundreds of millions of dollars thanks to their ability to tap into people’s desires for newness and vast amounts of choice. These retailers are basically online fashion department stores just minus the fridges and toasters. People like to skip between brands and cherry pick items across them in the most efficient use of their time. Going onto individual, mono-brand websites, especially if you don’t know what you want, feels like a blinkered process and like you’re not getting a full view of the fashion landscape. It also feels, on the majority of sites, as though there isn’t much on there. It is just isn’t very satisfying.
Last week, Farfetch Chief Executive, Jose Neves, predicted that brands would pull out of multi-brand retailers online and operate as e-concessions on marketplaces instead, much as they have done in bricks-and-mortar department stores. And, last year, Kering announced it would take some of its biggest e-commerce websites in house, by the first half of 2020, putting an end to a seven-year joint venture with Yoox Net-a-Porter (YNAP).
Kering’s online sales made up just 6% - this is against 18% of UK retail as a whole - of its 6.4 billion euro turnover in the first half of 2018, but it did grow by 80 percent in the third quarter, faster than revenue growth in department stores or its own shops. If these brands want to reflect general online retail sales they will need to double or triple the percentage of sales coming from online.
Taking back control of the Alexander McQueen, Bottega Veneta and Balenciaga websites will allow Kering full access to information such as client data.While this is great for the brands and the back-end, tech side, customers will notice little difference unless they have a radical rethink of how they present their brands on the front-end. Consumers are used to scrolling and discount incentives to drive sales which many of these brands, outside of sales season, won’t offer. It can also feel very clinical.
According to a report by Deloitte “Big data may help luxury brands to provide personalized and superior customer service through consumer segmentation, behaviour and sentiment analysis, and predictive analytics. Several luxury brands, such as Louis Vuitton, Burberry, Tommy Hilfiger, Dior and Estée Lauder, have already started to take advantage of these technologies, using AI-powered technologies, such as machine learning and analytics, to offer more personalized and timely customer services. They implemented their own AI-powered chatbots and now can sell products using targeted marketing, personalization, and timely automation.”
In November 2018, Kering created a data science team at group level to improve the service and shopping experience of its clients. Kering intends to get real-time 360-degree view of its customers to deliver rich and personalised experiences and meet their specific needs. LVMH, doesn’t break out separate online sales information, but they did reveal that the group's online sales rose by more than 30 percent in 2018. Ian Rogers, the first ever chief digital officer of the LVMH group, told Wired, last year, that he doesn’t like the word "digital" and he has the very tricky job of matching the luxury online customer journey with the pampered, indulgent experience IRL.
“It’s not the case that luxury shopping becomes self-serve on the internet: if I do buy something I expect a high level of service, even if I’m remote.” he said “You can see it's definitely strategic for us to invest in remote customer support, and it's directly downstream of our Internet strategy. There's this nonsense land of digital transformation where people wave their hands and they talk in impractical terms. Keep drilling until you have something practical that works and then rinse and repeat. Lose these nonsense words like "digital", like "data", like "social media". You have to get rid of this digital umbrella because it's just too broad. When somebody says, "We're really behind on digital", my response is, "You're behind in every aspect of your business?” he said.
Right - Spot the difference - YSL.com
According to Kering’s Chief Client & Digital Officer, Grégory Boutté, “Digital can be many different things at once - a distribution channel; a platform for offering seamless omni-channel services to clients; a driver of brand image and visibility; and a tool for engaging with customers in a personalized way. Digital technology, data science and innovation provide a way of offering our customers the best possible experience – on every touchpoint” he said.
Online and off-line isn’t separate, most brands now offer services such as check availability, reserve in-store, make store appointment, pick-up in-store, return in-store, exchange in-store, and buy online in-store. Kering said it will continue to develop partnerships with third-party e-commerce platforms "when relevant", but we’re seeing the beginnings of a power struggle between brands and retailers. They both need each other.
Now these luxury groups are focusing on their websites they need to rethink the entire thing. Their rigid ‘aesthetics’ and branding doesn’t allow for personality. Mono-brand luxury sites are restricted by the volume of product and while it changes, it doesn’t change often enough to the levels today’s customers have become used to.
Brands, such as Prada, Saint Laurent and Celine, also sell a lot of black, which doesn’t shoot well and doesn’t make the most inspiring of online images. Add in ‘collab. fatigue’ and these brands really need to develop a new idea for websites if they want to increase sales and move away from multi-brand sites.
Luxury brands have built themselves a boring digital straight-jacket and need to start thinking differently. They could offer FaceTime with sales associates in people’s local stores, or offer a live view way of browsing in-store and matching to items online. It’s going to be about making the virtual real and vice versa. There are many possibilities, but they need to unthink the “brand”.
BUY TheChicGeek's new book - FASHIONWANKERS - HERE
September is a month when you want to squeeze out the last rays of sunshine. Whether that’s a late holiday, or the hope of an Indian Summer, we’re not quite ready yet to pack away all our warm weather gear.
Left - Marrakshi Life - Pinstriped Cotton-Blend Shirt - £260 from matchesfashion.com
One brand which specialises in a floaty, 40 degree fantasy of Summer is Marrakshi Life. They were invited to the recent Barcelona Fashion Week and the use of colour and oversized shapes piqued my interest.
Launched in 2013 by New York photographer Randall Bachner, Marrakshi Life uses the local skills of Moroccans to give us that romantic Getty fantasy of North Africa.
The brand says they are “using the skill of traditional Morrocan weaving practices and a desire to take this sartorial heritage forward, Marrakshi Life uses ancient techniques to create clothing that is authentic yet with a fashion-forward urban twist.”
Bachner is committed to supporting responsible manufacturing via sustainable, low impact production methods. He describes his atelier in Marrakech as a community rather than a factory. Visitors to Marrakshi Life can experience the family feel whilst viewing the whole process from textile creation to finished design.
Right - Marrakshi Life - French X-Long Cuff Shirt - $323
Always wanted to visit Marrakech? See what happened when TheChicGeek visited the YSL museum there - here
A large bulk of the fashion industry is feeling pretty smug with itself. The just-gone G7 summit in Biarritz, France, a meeting of the world’s largest economies, saw French President Emmanuel Macron, accompanied by Economy and Finance Minister, Bruno Le Maire, Minister of Labour, Muriel Pénicaud, and Deputy Minister of Ecological and Solidary Transition, Brune Poirson, launch the ‘Fashion Pact’. An initiative to minimise the environmental impact of the fashion industry, the Fashion Pact, signed by various fashion companies and brands, made numerous commitments regarding sustainability, renewable energy and biodiversity.
Left - Tall glass of Pinault?! The 'Fashion Pact' launch at the recent G7 summit
Making plenty of noise, and, while anything in the right direction, particularly while the Amazon rainforest is burning, is welcome, it’s worth looking at some of the detail.
Thirty two companies representing around 150 brands and roughly 30% of the fashion industry committed to:
“100% renewable energy across own operations with the ambition to incentivise implementation of renewables in all high impact manufacturing processes along the entire supply chain by 2030.”
“Protect the oceans: by reducing the fashion industry’s negative impact on the world’s oceans through practical initiatives, such as gradually removing the usage of single-use plastics.”
“Restore biodiversity: by achieving objectives that use Science-Based Targets to restore natural ecosystems and protect species.”
“Stop global warming: by creating and deploying an action plan for achieving the objective of zero greenhouse gas emissions by 2050, in order to keep global warming below a 1.5°C pathway between now and 2100.”
These all feel like the least they can do. Words like ‘gradually’ and ‘ambition’ make most of this wishful thinking. But, waiting until 2050 to achieve zero greenhouse gas emissions is laughable. Most of the signatories will be dead by then. It’s 31 years away!!! Who’s to say any of these companies will still be in business?
We live in a very stressful and confusing time. Environmental paralysis is understandable amongst consumers not sure exactly what they can do to combat climate change. But, waiting until 2050 to ‘possibly’ make that new handbag zero carbon emissions ain’t one of them. Green lip service is becoming increasingly frustrating and brands are going to have to give definite and distinct decisions while updating consumers on progress and fact based information much faster than this. People want to see something.
The brands involved include adidas, Bestseller, Burberry, Capri Holding Limited, Carrefour, Chanel, Ermenegildo Zegna, Everybody & Everyone, Fashion3, Fung Group, Galeries Lafayette, Gap Inc, Giorgio Armani, H&M Group, Hermès, Inditex, Karl Lagerfeld, Kering, La Redoute, matchesfashion.com, Moncler, Nike, Nordstrom, Prada Group, Puma, PVH Corp., Ralph Lauren, Ruyi, Salvatore Ferragamo, Selfridges Group, Stella McCartney and Tapestry.
In April 2019, ahead of the G7 meeting, Emmanuel Macron gave François-Henri Pinault, Chairman and Chief Executive Officer of Kering, a mission to bring together the leading players in fashion and textile, with the aim of setting practical objectives for reducing the environmental impact of their industry. And the Fashion Pact was born.
This goes someway to explain the most noticable luxury absentee from the list, the LVMH group. LVMH, Kering's main luxury competition, announced in May that it was partnering with Unesco on a five-year deal, allowing the fashion houses in the group access to “a network of experts at the regional level and in different disciplines to drive the development and success of their initiatives to protect biodiversity” and secure transparent supply chains. They’ve also recently cemented a tie-up with British designer Stella McCartney to lead their charge in sustainable luxury.
The majority of these brands don’t know what the eco-future looks like, but they know they need to start making the right noises yet want to continue to generate billions of dollars in yearly turnovers. Signing up to things like the ‘Fashion Pact’ focuses minds, but the time frame makes it a case of we’ll start tomorrow, which goes against the current urgent 'Climate Emergency' feeling felt within the wider population.
Kering issued a statement saying, “Private companies, working alongside nation states, have an essential role to play in protecting the planet. With the Fashion Pact, some leading players in the fashion and textile sector are joining forces for the first time to launch an unprecedented movement. A collective endeavour by its nature, the Fashion Pact is open to any company that wants to help to fundamentally transform the practices of the fashion and textile industry, and to meet the environmental challenges of our century.”
If these luxury companies worked as quickly as they did when chucking money at Notre-Dame, after its fire, then we’d really be getting somewhere. Pinault found €100m (£90m) down the back of the sofa and the Arnault family stumped up €200m within hours of the flames being put out.
Governments will need to bring in legislation much sooner to force these companies to do more. We’re going to look back at this period of history and wonder how we got through it sanely, but what we know is, we have to start today.
The idea of paying to have something made, passing it on to someone else to sell, who will then pay you in a few month’s time, sounds like the cashflow diagram from hell. Unless the profit margins are huge, and even then it’s not ideal, wholesaling in fashion is difficult. Small brands, especially, need the constant stream of cash, traditionally have tighter margins, and need the crucial feedback of information with regards to successful products that can inform future decisions and where to put their limited resources.
The fashion wholesale model is broken and, now, even the big boys are deciding to step back. Luxury brands are also realising, finally, that the true value of selling directly to consumers is growing a database of customers and understanding exactly what they want in a shorter amount of time and being more reactive to those needs. Realising something is or isn’t selling in 3 to 6 month’s time is pointless and is what will suffocate even the biggest of brands.
Many luxury brands sat back and twiddled their thumbs over the past two decades while huge fashion corporations like YOOX/Net-A-Porter and MatchesFashion.com have grown with enviable customer lists and used huge amounts of information to improve their offer and grow further.
Now, the wholesale middle man is being pushed back to a point where brands want more control, know they will make more money directly and won’t be at the whims of a fashion buyer every season as to whether they’ve made the cut or not.
Prada announced last month that is would reduce its wholesale network in Italy and Europe in a push to have uniform prices for its products across different outlets and reduce markdowns. Before that, in March, the Milan-based company said it also would stop offering end-of-season promotions at its own shops in a bid to boost margins and protect its brand. They’ve obviously been watching the success of Gucci’s no-sale model and product that continues over seasons and doesn’t seem to quickly date.
In a short filing with the Hong Kong stock exchange, where the company is listed, the company's chairman Carlo Mazzi stated, “The Prada Group considers it essential to ensure greater consistency in pricing policies across retail and digital channels. This strategic review is intended to further strengthen the Prada Group brands with the aim of supporting sustainable long-term growth.”
Prada said it would end relations with some Italian and European wholesale partners and gradually replace them with new digital and e-commerce players.
While they’ve tried to improve their website, added a broader selection and launched onto sites like Mr Porter, Prada is doing it at a time when the brand has lost momentum and isn’t quite as in demand as it once was. It said the leather goods category will be the most impacted with the changes and this is their biggest segment with the greatest margins.
This DTC (Direct To Consumer) approach is something born from the internet and social media. The brand owns the customer and has a direct relationship. It knows their e-mail and address. It also knows what they have bought before and, most likely, things that may interest them in the future. As personalisation increasingly becomes more sophisticated, this will also help to offer more choices and brands can follow their customers through their actions.
Physical retail third party wholesale accounts allow you less control and inject potential disruption in your cherished luxury supply chain to the customer and, as Prada says, you can keep the prices constant and consistent (probably higher) throughout one geographical region.
Kering, owner of Gucci, Saint Laurent and Balenciaga, has announced it will take back control of its e-commerce operations, focusing on own branded sites where it can control its image and client data. Excluding Gucci, the YOOX/Net-A-Porter group operated e-commerce websites for most of the brands within the Kering group. The joint venture will now end in the second quarter of 2020. While not completely cutting off their nose to spite their face, Kering wants to turn more of its collaborations with third-party, multi-brand retailers such as Farfetch or Matchesfashion.com into what it calls ‘online concessions’, where it controls everything from the product assortment to their presentation. "Each time we move from wholesale to a concession we see our top line increase in a material way,” said Grégory Boutté, Kering’s Chief Client & Digital Officer, and former vice President of eBay. Kering has stated it was ‘not against wholesale,’ and did not plan to end its relationships with third parties altogether.
This is will be a play of power and something that I think will be difficult especially with the complexities of something like FarFetch coming from multiple retailers in different locations. This sounds like wanting your cake and eating it; we want your database, but in our own way. I’m not sure that many retailers will relinquish that amount of control, especially when you consider how many brands they sell and also the loyalty they now instil in these hard won customers.
Kering's total online sales — when including the business done through third party platforms, calculated at retail and not at lower wholesale prices — came to 9.4 percent of the group's 2018 revenue. Web sales through its own brand websites and online concessions made up 4.7 percent of revenue. This has huge room to grow.
Boutté has built up his digital team from 4 people upon his arrival at Kering in 2017 to over 80 people, today. He has realised the power of data. “The more data we have, the more precise our algorithm is and the better the experience is. The other thing is that it should lead us to excellence in terms of our operations.” he said.
Across the luxury goods industry as a whole, e-commerce accounts for around 10 percent of business today and should reach 25 percent of sales by 2025, consultancy Bain estimates.
This is about information and control. Controlling discount, controlling points of sale and controlling presentation. You can control more online, even with third parties. You can see it from anywhere. It's those pockets of physical wholesale boutiques or department stores in small towns that are harder to police and often unsold stock disappears into the grey market and ends up on discount sites and with other retailers.
Where once luxury retailers didn’t want to get their hands dirty, they are now rolling up their sleeves and have their eyes on the online prize; higher prices, more full price sell-throughs and control of that all important ‘data’. This will get more ferocious as the market becomes more saturated, growth slows and customers get increasingly more expensive to acquire.
I predict many brands will try to be exclusive to their mono-brand websites if they don’t get what they want with their third party partners, or possibly try the LVMH 24 Sèvres, now rebranded as 24S, route, but it will be hard. And expensive.
Retailers like FarFetch and MatchesFashion.com are decades ahead and thrive on new and small designers adding that colour and point of difference online. Luxury mono-brand websites often look boring, sterile and empty. People don’t shop in single brands, particularly when they are browsing. While the idea is logical and makes sense to reduce wholesale and take back more control, it will be far more complicated than that and add multiple costs to their business models.
When I received an e-mail from the 'Jacket Maker', at the beginning of the year, offering me the opportunity of designing my own leather jacket, I jumped at the chance. I wanted something with lots of fringing. I was thinking Harry Styles meets Stevie Nicks (look just what happened at the recent Gucci Cruise show!) to wear to a festival. A few e-mails back and forth and a few months later, voila, here's my western style leather jacket in oxblood red with maximum fringing. Rock on!
I've teamed it with a vintage, dead-stock 1970s yellow blouse with beagle collars I found on eBay, my current favourite jeans from Raey at Matchesfashion.com and some practical hiking boots for all those hours flitting between the bar and the main stage. Bring on the music...
Credits - #Gifted - Fringed Leather Jacket - Jacket Maker, Jeans - Raey, Boots - Merrell, #Bought - Vintage Blouse - eBay, Vintage Neckace - eBay
It was while at the Copenhagen fashion trade show, CIFF, previewing the forthcoming SS19 collections, when I noticed Phipps International. It was a print featuring extinct animals and the quirky and current twist on Americana and the great outdoors that made me stop and take note.
Left - Phipps International - Cotton-terry track top- £620 from Matchesfashion.com
I soon discovered that the previous collection, AW18, had been bought by matchesfashion.com and is available now.
Phipps International was established in 2017 by Spencer Phipps. Born and raised in San Francisco, he studied at Parsons School of Design in New York City graduating in 2008 with a nomination as “designer of the year” for his final year collection - an initial exploration of sustainable fashion.
He started his career at Marc Jacobs as part of the menswear design team and after, relocated to Antwerp to work with Dries Van Noten.
Currently based in Paris, Phipps, was founded on the principles of respect and curiosity for the natural world.
“We are exploring the concept of sustainability and environmental responsibility in the realm of style. Our goal is to change the way we as a culture consume by creating products that are made with respect for the environment, that can educate and enhance lives. We are always striving to improve our practice as we move forward and, as a modern fashion company, we are simply trying to do the right thing,” says Phipps.
Right - Phipps International SS19 - The extinct species print shirt that caught me eye at CIFF
What started as a small T-shirt project between friends has rapidly grown to become a modern, globally conscious fashion brand focused on building a like-minded community with the goal of re-connecting consumers to nature and the world around them.
The products are said to be made with integrity and are created with consideration for the environment using sustainable manufacturing practices and eco-friendly materials. Many of its producers are certified by GOTS or other environmental certification organisations which help to ensure that our products are made ethically.
In addition, most of their garments are made in Portugal which, as a country, is a global leader in the development of sustainable practices. All of their manufacturers there are required by law to recycle their waste appropriately, re-use treatable water, use alternative energy as much as possible, and follow fair trade labour practices.
Left - One of the jackets of the season SS19
It’s time to shine! You’ve probably noticed menswear getting bigger, brighter and sparklier, recently. It can probably be pinpointed to social media - how much black do you ever see over there? - but menswear has never been more experimental - I wrote about it here - High Street Peacocks
Left - Gucci - Sequin Bomber Jacket - £4040 from Farfetch
Well, it’s time to get the sequins on and not in the traditional night time/office Chrimbo party type way. This is sequins everyday, down the shops and out for coffee.
The most versatile shapes are the bomber jackets, which give you a Michael Jackson quality, and festival type T-shirts or shirts, which look great as the nights before longer and our days need some magic and sparkle. Don't be scared, shine bright like a diamond!
Left - ASOS DESIGN - Skater Trousers In Silver Sequins With Red Side Taping - £40
Below - ASOS DESIGN Festival Oversized Sequin Chevron Stripe Shirt In Silver - £40
Left - Valentino - Sequinned Bomber Jacket - £6250 from Farfetch
Left - Christian Louboutin - Huston Sequin-Embellished Ankle Boots - £995 from matchesfashion.com
Below - Jaded - Black, Green & Red Sequin T-Shirt - £50 from Topman
Left -River Island - Men’s Jaded Red Sequin Bomber Jacket - £130
Want sparkly feet? Read more here
Need more inspiration? See Best Dressed Chic Geek Jeff Goldblum rocking party season
As luxury online marketplace, Farfetch, debuts on the New York Stock Exchange, I ask, is it a worthy investment?
This isn’t particularly scientific, but, recently, I was looking for a particular AW18 Dries Van Noten jacket I’d seen, in store, in Selfridges. It wasn’t on their website, so I tried Mr Porter. Nothing. So, then I thought I’d search FarFetch. With over 600 boutiques said to be affiliated to their network, and 375 luxury brands, you’d expect a decent selection to come up. Nothing again.
Left - Is Farfetch high on the list of your luxury searches?
Dries Van Noten isn’t the most ubiquitous of fashion brands, but without a large network of own brand shops, it is usually sold wholesale to designer boutiques and is found in the majority of luxury department stores. It’s big enough. It felt strange nothing was on Farfetch. This isn’t the first time this has happened and the reason why it wasn’t my first place to search.
Farfetch just had its valuation lifted and is set to be valued at between $4.9bn and $5.5bn in its initial public offering in response to investor interest in technology stocks. The shares have a price range of $17 to $19, according to an updated regulatory filing published this week. The original range was $15 to $17.
Joseph Wong, an investor in luxury fashion stocks such as Burberry, ASOS, Bvlgari and Mulberry, says “Farfetch assimilates some of the best independent boutiques into a common platform. What’s valuable is the technology and the list of stores they represent. For that diehard enthusiast, he/she can do a quick search for that elusive Off-White piece or vintage Chanel piece, with a click to buy option.”
The majority of IPOs are often overpriced. They are filled with hot air to give healthy profits to the founders and early investors. Not to mention the fees to the money men to maximise the price and get the listing on its way. Farfetch, established in 2007, is being marketed as more of a tech company, where the prices are higher, rather than a retail marketplace model which takes a percentage from each transaction sold through its website.
The most recent Farfetch results show revenues of $267.5m in the six months to June 30, 2018, and losses before tax of $68.4m. Farfetch had total revenues of $910 million last year.
To put this in the context of the market, Yoox Net-a-Porter (YNAP), which was acquired by luxury conglomerate Richemont recently, valuing the business at €5.3 billion, and matchesfashion.com was sold to private equity firm Apax for over $1 billion last September. In the 12 months ending Dec. 31, YNAP saw year-end preliminary sales reach 2.1 billion euros ($2.5 billion). Matchesfashion.com recorded group revenue of £293 million ($393 million) to 31st Jan 2018.
“From our research of the luxury fashion market, FarFetch led in terms of traffic capture between 2015 and 2017, and maintains a good reputation. It has a sound business model, good commercials and no flagged operational or customer issues.” says Fleur Hicks, Managing Director of onefourzero, a data analytics and digital research agency based in London.
“It is an ambitious listing price, but in the context of the growing luxury fashion market, this could see returns within the next months and years, depending on how ambitious your investment strategy.” she says.
The global fashion industry is, according to a 2017 McKinsey report, valued at $2.4 trillion. If it were ranked, alongside individual countries’ GDP, it would represent the world’s second largest economy. From 2014 to 2018, the luxury fashion industry was expected to grow from 3% to 17% of the total fashion market. Annual online sales growth was expected to be 17% in the US, 18% in the UK, 12% in Germany and a whopping 70% in China, according to the report.
“It’s a good business model within a growing marketplace.” says Hicks. “The return risks of minimised stock and holding outlays look to outweigh the risks associated with reliance upon 3rd party operations, such as delivery. It averages a 30% mark up and thus a 50-odd% margin on operations. Incredible for the fashion industry. Also, the growth rate - 60% this year - is impressive.” she says.
Right - Is the value in Farfetch in its tech?
“Of the competitor set we analysed, Farfetch represented 3.8% of the captured online traffic market, representing the market lead. This competitor set only represented 17% of the potential traffic available (based on digital demand and traffic) and therefore the headroom for brand and revenue growth is huge.” says Hicks.
Farfetch’s future growth is potentially going to come from its ‘White Label’ service supporting brands such as Manolo Blahnik, Christopher Kane, DKNY and Thom Browne in their e-commerce offerings.
Farfetch have announced many strategic partnerships recently to further enhance the value of the company. These include Chanel, Chalhoub Group, one of the biggest distributors of fashion and luxury goods in the Middle East and the modesty luxury retailer, The Modist. They have also partnered with brands such as Harvey Nichols and Burberry. This is spreading their risk and also leveraging their technical expertise. It’s what Ocado has done in food.
Wong says, “You also need to consider what they will be using the cash raised from the flotation for. When Prada was listed, it was to relieve the billion Euro debt, open more stores and provide an exit plan for the founders.”
Farfetch are investing heavily in technology and this does explain some of the losses. They hope they will be able to charge other brands handsomely for this and the ever important 'big data'.
Are there any potential waves on the horizon? “Digital commercial disruptors are most likely to threaten large behemoths like Farfetch.” says Hicks. “This would most likely come from Amazon or AliExpress fashion lines and/or new ways to purchase fashion in a more interactive way. It’s unlikely that this will be a quick transition, so if FarFetch remain on pulse with technological change and consumer movements then they should be agile enough to move with the technical and operational trends as well as fashion trends.” she says.
Wong says, “Businesses are keen to connect directly to consumers, and cut the middlemen: think Kylie Cosmetics, Pat McGrath. This is happening to media industry too: Netflix originals instead of via Sky or Virgin Media. Not sure if Farfetch have addressed such concerns before.”
“There is also the downside for retailers: I once noted a £1500 price difference on a stunning new season McQueen coat: the result of a weak sterling and import taxes levied by a store from the Far East.” he says.
According to Bain & Company, the luxury goods market reached a record high of €262 billion in 2017. Online sales jumped by 24%, reaching an overall market share of 9%. Bain & Company predicts the market will be worth $446 billion market by 2025. Online’s share is expected to be its fastest-growing segment, rising from about 9% to 25% by 2025.
I think you need to look at Farfetch in the context of being a major player in a fast growing market. The valuation seems to be based upon its potential and the appetite for this type of technology stock.
I don’t think the name ‘Farfetch’ is particularly well known with general consumers. They need to work on the parent brand and getting its name into the luxury consumer’s head for that initial search. They also need to feel like the Amazon of luxury: all the choice on one site, which takes me back to my disappointing Dries Van Noten search. They could do better with packaging and more Instagrammable things to raise awareness of the consumer side of the brand.
There also have a lot of variables. They have different stores buying different things in different currencies and it loses something of that personal touch that other retailers seem to nurture and one of the reasons you go to a retailer.
Left - The online market is growing massively and is set to grow from 9% to 25% of the luxury market
As for selling the tech. to other brands, I think this is where the long-term value is, but they need to be careful not to overstretch themselves and have too many fingers in too many pies. It’s better to do fewer things well. It feels like they are still working out the direction they are going in. They could easily focus on either sides of this business and quietly reduce the other. They need to grow revenues while keeping the costs constant or reduced. They just don't want to lose the momentum.
The price seems, initially, far fetched, (soz), but the long term prospects for luxury online is looking good.
Fendi taste, River Island budget?! Worry no more, as the logo trend needn’t pass you buy just because your pockets aren’t deep enough. Fendi is probably the strongest of the logo brands, right now, and River Island has a clever rift on their own RI initials that look strikingly like those of the famous Rome fur house. Get involved.
Far Left & Left - River Island - Brown Slim Fit RI Monogram T-Shirt - £20
Below - Fendi - Logo-Print Raincoat - £1550 from matchesfashion.com
Opposite the Duke of Westminster’s magically misty plane trees, and, in, what is, the epicentre of moneyed fashion in London, 5 Carlos Place already feels established. The handsome red brick, late Victorian townhouse curves as it welcome you into its exclusive enclave and sits at the entrance of Mayfair’s most exclusive shopping area.
Left - The entrance to 5 Carlos Place
This is matchesfashion.com's all singing, all dancing townhouse. It’s part retail, part cafe, part personal shopping, part experiential, part showcase, part exhibition space, but totally the buzzy physical heart of the online phenomenon matchesfashion.com has become.
matchesfashion.com previously had a townhouse in Marylebone, but it was more an exclusive personal shopping concept with no retail. That has now closed. The majority of its stores were always in the periphery of London in wealthy neighbourhoods, while 5 Carlos Place is slap, bang in the middle of the middle and illustrates how far matchesfashion.com has come.
While the signage outside is discreet, it’s the amount of people coming and going that will draw your attention. Not exactly something this area is used to - high footfall - it will definitely ripple out to the adjacent retailers and give that energy these types of areas often lack.
Right - The third & fourth floor houses these bookable shopping suites
The five-story townhouse has been redesigned by architect Philip Joseph, partner of fashion designer Erdem Moralioglu, while retaining many original features like the plaster ceilings and fire places. The first two floors are retail. More a showroom than a traditional store, it is currently showcasing an exclusive partnership with Prada - bananas and all! But, it’s not all big budget names, the next designer to have the space is Marine Serre.
Left - The Regency like plaster ceilings
The items are displayed with QR codes next to them so you can simply link to the appropriate page and then order. Everything can be sent to the townhouse within 90 minutes or get sent to your home address. If matchesfashion.com prices are a little out of your league, they currently have a Prada X matchesfashion.com vending machine dispensing matches, coloured markers and the like. This space will change every two weeks, which is really the speed of online being reflected in physical retail.
The ground floor leads out to a garden at the back with a spacious patio surrounded with Australian tree ferns, lush planting and the higgledy-piggledy backs of this row of London townhouses and all the architectural quirks many years of alterations have produced.
Behind glossy, lipstick red doors and woodwork, two further floors house private shopping suites. These can be booked online and you can have items sent to be there waiting for you to try on when you arrive. The changing rooms - more like mini-suites - can be customised to the customers' Spotify accounts and look even more comfortable than the luxurious Connaught hotel opposite.
Upstairs in the attic is the café area and with its roof window feels like a nursery space Mary Poppins would be caring for the children. This is the most flexible floor and will host talks and different catering concepts plus the home of matchesfashion.com's new broadcasting suite and podcast centre.
The current café is Marchesi, the Prada-owned patisserie brand, to tie in with the retail downstairs. The next takeover is the Holiday Café followed by the vegan Maisie Café both from Paris.
Right - The first two floors are retail, currently showcasing an exclusive 120 piece collection from Prada
Highlights from the ‘What’s On’ event schedule for September and October - you can apply for the tickets online - include Theresa Wayman in an acoustic set, Mario Sorrenti book launch, Sarah Mower in conversation with Richard Quinn, a supper club with Australian chef Skye Gyngell and a Phillips preview of their ‘London Design’ auction.
The first impression of 5 Carlos Place is that it’s busy. Not just with people, but events and the energy of hosting so many talks, dining concepts and introducing new designers.
Left - The ground floor patio with garden
This is retail as inclusive members club and feels much livelier than their previous space. I’d be surprised if they can sustain this speed of turnover of retail spaces and events, but it’s exciting to see so much on the agenda.
This feels like online really spilling out into physical retail and understanding the reasons stylish people leave the house. They want to learn and experience as well as shop. London is the home of matchesfashion.com and it will be interesting to see whether this idea could be rolled out to other major centres like New York or Hong Kong.
This has been really well done, is in a great location and encapsulates the energy of a retailer really enjoying its standing in the luxury e-commerce sphere. I can’t wait to return and that’s exactly the point.