The news: Luxury fashion platform Farfetch and retailer Neiman Marcus Group (NMG) are entering into a mutually beneficial partnership, per a joint announcement. Farfetch will invest up to $200 million in NMG, while the retailer will use the platform’s tech to power Bergdorf Goodman’s website and mobile apps.
What’s in it for Neiman Marcus: Since filing for bankruptcy in 2020 due to the pandemic, Neiman Marcus has restructured its business to prioritize digital sales over brick-and-mortar. The deal with Farfetch gives the retailer access to much-needed capital to grow its tech and digital capabilities, while enabling it to leverage the platform’s existing ecommerce solutions.
Analyst insight: “This partnership should put an end to the recent pressure on NMG to spin off its ecommerce business or split off Bergdorf Goodman, while giving the company much-needed access to global luxury shoppers—especially in China, where Farfetch has a deep partnership with Alibaba— as well as a trove of data on these consumers' online shopping habits,” said Sky Canaves, eMarketer principal analyst at Insider Intelligence.
What’s in it for Farfetch: Signing up a major luxury retailer to its platform—particularly one with strong name recognition—could give Farfetch’s sales a significant lift, while giving it insight into how customers shop across channels.
The big takeaway: Luxury retail has been slower to adapt to the ecommerce boom, in part because the in-store experience is still central to the purchasing journey.