Farfetch will acquire beauty brand Violet Grey for an undisclosed sum, the e-commerce platform announced on Friday. In a nod to larger implications of the deal, the parties revealed that Violet Grey founder Cassandra Grey will act as chairwoman for the 10-year-old brand, while also becoming Farfetch’s global beauty advisor and the co-founder of NGG Beauty, a division of Farfetch’s New Guards Group, with both entities looking to enter into the beauty space. The launch of a beauty category on the Farfetch marketplace is scheduled for later this year.
From a branding perspective, Farfetch appears to be readying for a launch, filing trademark applications for registration in the U.S. and the European Union for its name for use on a long list of cosmetics and beauty-related goods – from eyeshadow, body lotions, face creams, and hair care products to cosmetics bags, perfumes, and exfoliating brushes – on January 19.
All the while, as TFL reported last year, leading up to the death of Off-White founder Virgil Abloh, whose brand counts New Guards Group as its official licensor, Off-White appeared to be preparing for a venture in the cosmetics space. Counsel for the brand filed applications for registration in the U.S. for the mark PAPERWORK for use on cosmetics back in July 2021 on an intent-to-use basis. More recently, the brand lodged an intent-to-use application with the U.S. Patent and Trademark Office (as well as with trademark offices in the Philippines, Malaysia, and Serbia) for a logo that “consists of a face looking up” for use on cosmetics in October.
Reflecting on the deal, the terms of which have not been disclosed, Bernstein analyst Luca Solca stated in a note on Friday that this “dovetails with prior acquisitions of streetwear brands,” such as those under the New Guards umbrella, with the aim of creating “traffic synergies for Farfetch with a special focus on younger consumers.” The news comes as Farfetch has “recently suffered from the broader sector rotation penalizing technology stocks,” per Solca. The London-based retailer has also suffered from “pandemic normalization, as consumers go back to physical stores, multi-brand boutiques are less prepared to pay for traffic generating Farfetch promotions, and more inventory from e-concessions with brands brings higher price discipline.”
This will mark Farfetch’s second attempt at beauty, having “already tried beauty years ago and discontinued it,” according to Solca, who contends that beauty is a tough segment “as it develops smaller average baskets, making fulfilment and logistics cost more difficult to offset,” and given that “many multi-brand digital players [already] exist in this space.”
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