Style capital submitted a bid for Farfetch’s Ngg

An Italian fund is set to rescue Farfetch’s New Guards Group (Ngg). According to MFF, Style capital has submitted a bid to take over the majority of Ngg from Farfetch Holdings. Palm Angels, Marcelo Burlon County of Milan, Heron Preston, Alanui, Opening Ceremony, and Ambush are among the brands housed by the group, which also holds the license for Off-White, a Lvmh brand, as well as for the distribution of Reebok in Europe. An Italian fund stepping in to set up a system operation to support a Made in Italy Group to ensure its survival is a positive sign for the market. However, the bid from Roberta Benaglia’s company is currently on hold because of the uncertainty surrounding Farfetch’s rescue by Korea’s Coupang (see MFF of December 18). As a result, before making a move on the subsidiaries, it will be crucial to ascertain the fate of their parent Company, José Neve’s fashion and luxury platform.

According to the agreement, Coupang will inject 500 million dollars in emergency funds (approximately 458 million euros at yesterday’s exchange rate) as part of a pre-pack administration process to keep the platform in business. Coupang, which is frequently compared to China’s Alibaba, is primarily interested in Farfetch’s online activities, whereas Style Capital aims to acquire Farfetch’s share in Ngg and its main brands in order to ensure the continuity of their operations. Therefore, it would be a win-win situation. According to financial sources, Ngg will close 2023 with a total turnover of nearly 450 million euros, excluding Reebok’s business. Its top brands include Off-White and Palm Angels.

Off-White, a brand founded by Virgil Abloh, is currently licensed to Ngg, while Lvmh retains control over the Company. It was acquired by Lvmh as part of the deal that resulted in Abloh’s appointment as Creative director of Louis Vuitton’s menswear collection. Palm Angels, on the other hand, is currently 60% owned by Farfetch, with the remaining 40% owned by a group of shareholders, including designer and founder Francesco Ragazzi. According to the most recent financial statement, in 2023, the Brand generated 120 million euros in revenues, down from 167 million in 2022. In recent years, the Brand has implemented a business expansion policy involving product and retail with the goal of doubling revenues in the medium term (see MFF of November 10, 2022). Recent retail operations include the opening of a store on Rue Saint-Honoré in Paris last March, a boutique in Mykonos in July, and a store in Thailand (see MFF of November 11).

From a strategic point of view, America has been Palm Angels’ primary focus in recent years, contributing 25% of revenues in 2022 compared to Europe, which was the top market with 45%. The company has recently expanded into womenswear and focused on accessories, which contributed 10% of 2022’s total turnover, a figure that has never been disclosed. Designer Francesco Ragazzi is well-known in the fashion world for his long collaboration with Moncler, with which he still creates ad hoc collections. Palm Angels has also signed several co-branding agreements, the most recent of which was with Tod’s for footwear. The Ngg agreement would complement the several deals concluded by Roberta Benaglia’s Company, which now operates through Style Capital II. In the 15 years since Style Capital was founded, the manager has led two brands to become fashion unicorns: Golden Goose and, more recently, Zimmermann. Since its acquisition in 2017, Forte Forte’s revenue has increased from 14 million euros to 29 million, while Msgm’s has grown from 40 million euros when it was acquired in 2018 to 55 million as of last year.

Excellent work was also completed with Re/done, a digital native company based in California that grew from 12 million dollars in 2018 to 48 million. The acquisition of Luisaviaroma dates back to 2021, while the entry with an 80% share in the capital of Gdm Milano, designer Giuseppe di Morabito’s Company, was made in April of this year. In the 15 years since the beginning, Roberta Benaglia has accomplished a number of noteworthy accomplishments, raising the Italian flag at a time when transalpine groups, primarily Lvmh and Kering, are making the majority of acquisitions. (All rights reserved)