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.
- As part of the agreement, NMG has committed to implementing several Farfetch Platform Solutions (FPS) tools, including foundational international services. Neiman Marcus and Bergdorf Goodman will both join the Farfetch Marketplace to sell products globally.
- By relying on Farfetch to do most of the heavy lifting on the ecommerce side, Neiman Marcus can focus on integrating its in-store and digital capabilities, which could enable it to compete more effectively with other luxury retailers like Saks Fifth Avenue and Nordstrom.
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.