Farfetch takes control of Palm Angels via NGG
This summer, Farfetch took a majority stake in Palm Angels via New Guards Group (NGG), the Italian company that seeks to gather together the most interesting labels of the moment, and which was acquired by the UK-based luxury e-commerce giant at the end of 2019. The group acquired a 60% stake in the high-end streetwear brand founded and led by designer Francesco Ragazzi, which is one of NGG's top brands and which has seen accelerated growth in the last two years.
As indicated to FashionNetwork.com, in a document published this summer, Farfetch confirmed the operation in the following words: "on July 20, 2021, New Guards finalized the acquisition of 60% of the outstanding capital held by Palm Angels S.r.l, owner of the brand Palm Angels. Palm Angels is a luxury fashion brand based in Italy which has seen growth in its revenues and profitability since the acquisition of New Guards by the company in 2019. Furthermore, New Guards has agreed to a buy and sell option with Palm Angels S.r.l's remaining stakeholders, meaning that New Guards will purchase the remaining 40% of the Palm Angels in 2026."
According to MF Fashion, which first reported on the operation, Farfetch acquired its stake in Palm Angels from Ragazzi and Davide de Giglio – the co-founder and boss of NGG – both of whom held 50% of the business. The company acquired a 30% stake from each of the two men, leaving each of them with 20% of the business. The value of the transaction has not been disclosed.
Launched in 2015, Palm Angels is currently in the midst of a phase of accelerated growth and is developing projects on all fronts. The Italian ready-to-wear brand, which is known for its chic streetwear stylings and which has been showing its collections in Milan since 2017, has teamed up with Missoni, Vilebrequin, electric bike maker Mate, and rapper Team Wang for capsule collections, as well as with Sweden's 16-69 in order to launch a fragrance collection. The label also made its debut in the kidswear category with a line for 4-12-year-olds a few months ago and is now planning to expand into eyewear.
Instantly recognizable for its omnipresent logo in Gothic lettering, as well its recurrent leitmotif of cannabis leaves, the brand, which also opened its first boutique in Miami in July, offers t-shirts, sweaters and tracksuits channeling a cool, laid-back, Californian attitude, as interpreted by the Italian sensibilities of Ragazzi, who notably worked for more than 10 years at Moncler.
One might ask why Farfetch has moved to purchase a majority stake in Palm Angels, having spent $675 million two years ago in order to acquire the entirety of NGG, the group behind Off-White, Palm Angels, Marcelo Burlon County of Milan, Heron Preston, Alanui, Unravel Project and Kirin Peggy Gou, which has since also acquired Opening Ceremony and Ambush. The reason is that NGG generally manages the production and distribution licenses of these brands, only some of which it holds a stake in.
And so, in the case of one of the group's star brands, Virgil Abloh's Off-White, NGG was only its operational partner, a fact which allowed LVMH to swoop in and acquire 60% of the label last summer, all while Farfetch continued to hold the Off-White production and distribution license, which is valid for the next 20 years, according to information provided to FashionNetwork.com. It's therefore not difficult to imagine why the e-commerce giant might want to guarantee its control of Palm Angels, no doubt so as to prevent one of NGG's hottest brands from slipping away.
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