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Farfetch Acquires Browns

It emerged on the 12th of May that independent online retailer Farfetch has bought one of London’s favourite boutiques, Browns. Farfetch have said they will take the 45 year old retailer forward in terms of technology and reach, but will not end the founding family’s involvement.

“We have been a very successful partner of Farfetch for over two years and have enjoyed the journey,” Browns founder Joan Burstein — widely known as ‘Mrs B’ — said. “We are delighted to be able to announce that this is the next step for Browns and we couldn't think of a better, more forward-thinking partner to take the reins and respond to the challenges of the future.”

According to Vogue, The Burstein family will remain advisors to the business - with both Simon and Caroline Burstein retaining seats on the board of directors and Joan Burstein appointed honorary chairman – whilst former Net-A-Porter fashion director Holli Rogers will join the business as CEO of Browns.

 

The Store of the Future

With the aim of creating a “pioneering mix of technology and in-store experience”, Farfetch hopes that the new relationship will help develop a global technology platform that will “shape the retail experience of the future”. Following this aim, they have named the project the ‘Store of the Future’ in which they will test new digital concepts including ways to manage inventory and evaluate shoppers’ desires, all while continuing to sell to Browns’ clients in fashion and luxury.

“The vision is to answer the question, ‘How will people shop for luxury fashion five or ten years into the future?’ This won't be purely online,” José Neves, CEO and founder of Farfetch added. “The answer, we believe, will be a seamless merge of a fantastic physical experience with powerful, yet subtle technology. Browns is the perfect partner for this evolution.”

Neves’ own career has shifted between physical and digital retail. In the early 2000s, the Portugese entrepreneur ran B-Store, a multibrand footwear store on London’s Savile Row, for which he received a British Fashion Award for ‘Retailer of the Year’ in 2006. Having shifted that focus to the online space with Farfetch, the partnership with Browns somewhat brings him full circle back to physical retail.

 

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José Neves, CEO and Founder of Farfetch. Image courtesy of The New York Times.

 

The online retailer has been going from strength to strength since it launched in 2008 by Neve. In a recent development, the luxury online boutique was valued at $1 billion following an announcement that it has received investment of $86 million in March of this year. This latest investment means that it joins the "Unicorn Club" - an elite group of businesses that were started since 2003 and are valued at over $1 billion by public or private investors.

Founded in 2008, Farfetch helps roughly 300 independent designer stores link up with customers around the world. Partner stores include the trendy L'Eclaireur in Paris, H. Lorenzo in Los Angeles and Fivestory in New York.  In 2012, Browns partnered with Farfetch, which, according to Neves, opened up new markets for the boutique, including Brazil, China, Japan, Russia and Korea.

We do not want to change the DNA of Browns at all. The idea is evolution, not revolution.

Neves told Vogue: “Farfetch is truly a global business, we have customers in 180 countries and boutique partners in more than 30 countries, that's why the investment will be used to fund our international expansion. More of our international customers will be able to shop in their own language, using their own currency and with 24/7 access to customer services in their local language. This year we are also launching in Spanish, German and Korean.  For our worldwide customers opening up Japan and Australia to our supply chain will grant them easy access to shop unique products and brands which ordinarily are not available outside of these countries."

Joan Burstein, is credited with launching the careers of designers as diverse as John Galliano and Hussein Chalayan. The store bought up the design school graduation collections of said designers and put them in its windows, ultimately launching them to success. The family-run boutique is housed in several interconnected townhouses in Central London and is still considered a pioneer in ground-breaking international fashion, making the connection with Farfetch inevitable.

 

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 Joan Burstein, Founder of Browns. Image courtesy of Citizens of Humanity.

 

New Technologies

Sandrine Devaux who was hired from the Harvey Nichols store chain to run the ‘Store of the Future’ says many of the changes will be invisible to shoppers. Devaux plans to employ RFID, or radio-frequency communication, and NFC, or near field communication technologies, by using chips on garments to quickly locate them and get them to consumers. Mobile payment technology should allow someone to shop from their home or hotel room. Devaux is interested in applying artificial intelligence to predict consumer behaviour, even taking into consideration, for instance, the weather and how a rainy day impacts desires.

Mr. Burstein, who is 63, said he’ll soon be looking for another job after taking a “big box of Kleenex” to the store when he informs employees of the sale.

I’ve always wanted to internationalise Browns. Of course it hurts. It hits you in the gut. We’ve put our love and everything in it. It’s handing over a baby.

This announcement puts more pressure on online retailers, brands and bricks and mortar boutiques to forge alliances to tackle the complicated world of shopping. Yoox recently agreed to buy Richemont’s Net-a-Porter in an all-share deal to create an industry leader with combined sales of $1.4 billion.

In recent years, omni-channel has emerged as a major buzzword in retail, with digitally native brands such as Nasty Gal, Bonobos and Warby Parker all recently launching physical stores. With its model of digitising inventory found in physical stores, Farfetch is well positioned to lead the charge towards omni-channel retail. But it does not have the answers yet. “The overall vision will be developed over years — not months — and will be agile and iterative, mixing technology we build at Farfetch with technology we integrate from third parties,” said Neves.

Farfetch sales are expected to rise to more than $500 million this year, up from $320 million in 2014. Browns, an early adopter of ecommerce, now makes more than a quarter of its sales online.

We’re sure we are not the first to say that we are extremely looking forward to seeing what revolutionary changes the collaboration is going to make to the retail world.

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