Luxury marketplace Farfetch has bought New Guards Group, bringing in-house the ability to co-create and scale buzzy brands and products. In doing so, Farfetch is effectively building out its own private label platform through which it can launch, test and scale brands on its existing online and offline sales channels.

New Guards Group is the Milanese holding company founded in 2015 that has launched many of luxury streetwear's most-hyped and successful brands, including Off-White, Palm Angels and Heron Preston.

Farfetch acquired New Guards for $675 million in a cash-and-stock deal, twice the group's annual revenue and seven times its earnings before taxes. The deal is expected to close in the third quarter of 2019. Farfetch sees the value in New Guards not necessarily for its portfolio but for its ability to spot talent and launch highly sought after brands like Off-White — the Virgil Abloh label that is the pre-eminent example of the new luxury streetwear boom. The deal also adds to its own slate of operated businesses, which includes Browns department store and sneaker reseller Stadium Goods. "[New Guards is] a platform — they are not a brand, they are not a Maison, they are not a conglomerate," said Farfetch founder and Chief Executive José Neves. "They are absolutely best in class in terms of spotting the new stars of tomorrow." Farfetch is betting that the addition of New Guards will create a flywheel effect that will grow brands at a fast rate. It hopes to capture more of the profits of transactions on its marketplace and give its owned labels a boost online and through its network of more than 650 boutiques stores.

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