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Neiman Marcus Parts Ways With Luxury Online Retailer Farfetch
February 7, 2024
Neiman Marcus Group has decided to terminate its commercial partnership with online luxury retailer Farfetch. This move shakes up the dynamic between the two companies, each a major player in their respective domains. Neiman Marcus primarily operates in physical retail spaces, while Farfetch is a digital-first luxury platform.
The alliance between Neiman Marcus and Farfetch took form roughly two years ago. At that time, Farfetch was flying high and invested a hefty sum of $200 million in Neiman Marcus. In return, Farfetch received a minority stake in the iconic American luxury department store chain.
The collaboration reached further depths when Farfetch took over the web presence of Bergdorf Goodman, a subsidiary of Neiman Marcus. Farfetch overhauled Bergdorf Goodman’s website and mobile application, giving the brand an enhanced digital platform. Meanwhile, Neiman Marcus and Bergdorf Goodman became part of Farfetch’s expansive online marketplace, joining as partners.
However, this partnership was not destined to last forever. Farfetch has recently been experiencing financial difficulties, forcing it to seek rescue funds. The company received a significant lifeline in the form of a $500 million investment from South Korea’s Coupang and U.S.-based investment firm Greenoaks.
Neiman Marcus has clarified its stance on the partnership dissolution. The luxury retail group stated that the Bergdorf Goodman website and app would continue to operate independently, catering to its customers’ luxury e-commerce needs. The digital platforms will no longer be under Farfetch’s umbrella.
Interestingly, Farfetch will not sever all ties with Neiman Marcus. Despite the end of their commercial partnership, Farfetch will remain as a minority, non-voting investor in the American department store. This arrangement emphasizes the unexpected nature of the retail industry, where alliances can quickly shift and business strategies can take unexpected turns. It remains to be seen how this change will impact both companies in the long run.
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