Farfetch invests $200 million in Neiman Marcus and Bergdorf Goodman

Online luxury retailer Farfetch has invested $200 million in Neiman Marcus Group, becoming a minority owner of the company and allowing the Dallas-based retailer to expand its international online sales faster than it could alone.

Neiman Marcus will use the new funds to accelerate investments in technology and digital capabilities, the companies said Tuesday. The deal brings together the resources of two industry leaders competing for online luxury shoppers.

Initially, the partnership will bring Farfetch’s online shopping platform to Neiman’s New York sister retailer Bergdorf Goodman. It will expand BG.com and its mobile app with global capabilities and services.

Both Bergdorf Goodman and Neiman Marcus will be added to the Farfetch Marketplace as partners, meaning customers will be able to shop the U.S. stores and their brands from anywhere in the world, the companies said.

“This partnership is about revolutionizing the luxury landscape globally, both online and offline, by combining NMG’s iconic presence in the U.S. and Farfetch’s luxury new retail vision and technology,” said José Neves, Farfetch founder, chairman and CEO. Farfetch is a London-based company that trades on the New York Stock Exchange.

Geoffroy van Raemdonck, CEO of Neiman Marcus Group, said the Farfetch platform is “best-in-class,” adding that the deal will help expand Bergdorf Goodman, which operates two stores in Manhattan, to become an even stronger global digital luxury retailer.

Darcy Penick, president of Bergdorf Goodman said, “This is an incredible opportunity to amplify our brand, further embed the Bergdorf Goodman experience across online and in-store, and continue our investments to further establish Bergdorf Goodman as a digital luxury leader on a global scale.”

Investing in the online business, which represented more than 30% of total sales before the pandemic, has been a priority for van Raemdonck and was accelerated while stores were closed during the pandemic. While Neiman Marcus is expanding its reach to more customers geographically with Farfetch, the Dallas retailer made an investment in luxury accessories reseller Fashionphile in 2019 to bring in customers who want to be part of the circular economy.

“I believe the U.S. luxury market is at a pivotal point,” Neves said. “Whilst the U.S. is proving to be a long-lasting source of growth for the luxury industry, fueled by younger generations who are highly engaged with the category, businesses will have to significantly upgrade their digital capabilities — powering both online and offline customer journeys — to meet these new customer expectations and stay ahead in what is going to be a competitive space in the coming years.”

Farfetch reported a smaller than expected loss for the fourth quarter and swung to its first full-year profit of $1.47 billion in 2021. More than $4.2 billion in merchandise was sold on the Farfetch platform, and its total revenue was $2.25 billion.

Since Neiman Marcus emerged from its bankruptcy reorganization in 2020, the privately held retailer hasn’t disclosed financial results. But the company has provided updates. Last month, Neiman Marcus said the November through January holiday quarter resulted in a comparable sales increase of more than 7%. Adjusted earnings before interest, taxes and other items were up 15% compared with the holiday quarter before the pandemic in 2019.

Neiman Marcus Group’s other owners are PIMCO, Davidson Kempner Capital Management and Sixth Street. The deal is expected to close in the third quarter.

Neiman Marcus said this is just the beginning of its partnership with Farfetch and that there will be more to share in the future.

J.P. Morgan is serving as exclusive financial adviser to NMG, and Kirkland & Ellis LLP and Norton Rose Fulbright LLP are serving as legal counsel. Bryan Cave Leighton Paisner and Taylor Wessing LLP are serving as legal counsel to Farfetch.

Twitter: @MariaHalkias

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