At the start of his career, with $1000 in his bank account, David de Giglio took a chance on a business adventure that he saw propelling the Italian online fashion industry onto the world stage. Now, he has sold such business, New Guard Group (NGG), for over $675 million. Taking a ‘fast fashion’ approach as to how the future of online fashion retailing will continue to prosper in Italy, many are left questioning whether De Giglio’s vision is more detrimental to the fashion world than it originally seemed.
Bought by British-Portuguese online fashion platform Farfetch, CEO Jose Neves, saw something different in De Giglio and his relatively new business NGG. Covered in tattoos, dressed in skatewear and at the young age of 45, De Giglio does not strike you as the typical Italian fashion designer (a long way from Donatella Versace). His vision for NGG was to create an Italian multi-brand fashion conglomerate that would focus largely on luxury streetwear brands that were geared towards a large online audience.
NGG is made up of eight luxury brands, which include hugely successful labels such as, Off-White, Opening Ceremony and Palm Angels. Unlike other fashion companies in Italy that are often seen as steeped in tradition and the “old way of doing things”, NGG has been seen as groundbreaking in its ability to use low-cost and contemporary trends to successfully market its products.
Giglio explained in an interview to the New York Times, “there needed to be a new energy in our old system, a way to incubate exciting young brands from exciting new people”.
Another factor that sets NGG apart, is that most of their workers and designers, have not come from traditional fashion school backgrounds. Whilst most fashion companies look for graduates from highly esteemed colleges such as New York’s Parsons School of Design, NGG’s team come from a diverse range of industries such as PR, graphic design and music. What this variety in skill set means for the brand, is that they are incredibly skilled in not only building a brand but being able to market it to a wider and younger audience.
Farfetch and NGG’s Vision
Now that Neves and Farfetch have bought NGG, the two heads of each company are working together in deciphering what they predict will be the future of each business. What seems to be emerging, is a desire to convert luxury fashion into fast luxury fashion.
What this means is, Farfetch has taken on NGG with two key things in its vision:
Number one: it wants luxury fashion to become faster.
Farfetch aims for all companies involved with NGG to produce multiple collections every year, taking advantage of trends and capitalising on the profits they could bring. Here lies quite a lucrative proposition – pump expensive clothing out to high-paying customers, multiple times a year and at a rapid pace. And it’s already happening! NGG boasted recently that in 2018 they were able to produce 200 collections within the year, with aims to continue this fast-paced production in the years to come.
Number two: Farfetch wants to take the idea of ‘fast luxury fashion’ and completely change the fashion industry.
Farfetch plans to take the growing engagement surrounding influencer and celebrity culture in 2020 and turn these statistics into profits within the fashion world. Essentially, the brand envisions that celebrities, Youtubers, Instagramers etc. will be able to make multiple “luxury style” collections for high-end brands, and therefore profit off of the millions of subscribers/followers that such influencers attract to each product. This trajectory would change the fashion world in that celebrities and influencers would set the trends of the industry, rather than highly revered designers.
Is this sustainable?
However, with Farfetch investing such a significant amount of money into this business venture, many analysts have been left wondering: is this really worth it?
On the surface, it seems that the business has been making a substantial profit from such a risky move. Farfetch reported in August that the total value of products sold on its platform increased by 48% year-over-year to $721 million, making $365 million in revenue. In regards to luxury fast fashion, the Off-White Jordan Sneakers exclusively attracted over 800 million hits to the website without any paid marketing.
Nevertheless, despite this initial success, there is still a great amount of doubt that surrounds the brand.
Firstly, financial analysts are still not convinced by the longevity of the brand’s relevance. Like every other fashion luxury brand at this time, Farfetch will have to have to prove its stamina and long-term vision in order to survive as a successful company within the current recession. Unlike traditional brands such as Valentino and Prada, there is not yet a significant amount of brand loyalty towards Farfetch, which may cause their financial success to waver.
New York Times emphasised, “questions linger as to whether New Guard Group’s model of hyped consumption and quick turnaround might eventually run out of steam”.
Secondly, the sustainability aspect of luxury fast fashion is one of great concern. With climate change at the forefront of most young peoples minds, creating an online brand with the central goal of “riding trends”, may not be the best long-term marketing move for Farfetch. The idea of bringing out 200 collections a year, essentially means that there will be 200 times more waste in the world. With fast trends comes clothing that rapidly becomes obsolete, creating a large amount of debris that landfill will inevitably have to swallow up. Whilst influencers do in fact have more sway on the trends of fashion than ever before, so too do their followers in demanding ethical and sustainable products from those they look up to.
It seems that companies such as Farfetch and NGG are gearing us towards a fashion future that prioritises rapid consumption and large profits over quality and durability. We as consumers need to decide what we prioritise in a fashion brand and reflect that in what we choose to buy. After all, we are the ones that will determine the course of the fashion world, all through the power of the dollars within our pockets.
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