Is New Guards Group Set to Become the Kering of Streetwear?

Backed by parent company Farfetch, New Guards Group began the new decade with a shopping spree. First by acquiring a majority stake in Japanese brand AMBUSH, swiftly followed by the intellectual and trademark property of American cult label Opening Ceremony. The two new acquisitions are just the latest to an already existing portfolio of 8 luxury-streetwear brands (like Heron Preston, Palm Angels and the lesser-known Unravel Project), tallying up the group’s total to ten names since its conception in 2015.

Self-recognised as a ‘platform but not a conglomerate’, New Guards seeks to establish a pattern of socio-digitally relevant designer-led brands that speak the language of Gen Z and millennials, yet are in need of infrastructural support from production to distribution. The not-conglomerate is known to work in 24/7 shifts with Italian factories, churning out a time-to-market of just three weeks. Co-founder Davide de Giglio stated: “[We do] luxury fast fashion,” of which there’s no doubt, considering their recent add to carts. The group plans to re-launch Opening Ceremony through an expansion of its in-house line with more categories and frequent releases. Founders Carol Lim and Humberto Leon maintain reign as co-creative directors, while the entire production is set to shift to NGG’s home base in Milan.

De Giglio shared that: “the addition of Opening Ceremony to our group brings Humberto and Carol’s phenomenal creativity together with our expertise in developing global luxury brands.” As America’s youth grieves the closing of Opening Ceremony stores in Los Angeles and New York, the label will set up a showroom in Paris and establish a digital strategy with e-commerce savvy Farfetch. “This next step for Opening Ceremony means we get to connect our desire to invent the future and design for our community to a dynamic infrastructure,” said the co-founders in a joint statement.

Till date, NGG has amassed brands with an artistic touch; from DJ turned designers like Marcelo Burlon, Heron Preston & Peggy Gou to artists like Anna Blessmann. Just days before bringing in Opening Ceremony, NGG had revealed on Jan 10th the acquisition of Ambush, a considerably older brand – in comparison to other labels – that were picked up right when they rode the high tides of street-culture. The group plans to push the geographic boundaries of Ambush’s retail, expanding beyond Japan by moving a large portion of the production to Italy; though jewellery and denim manufacturing, along with the design team, will remain in Tokyo.

Founders Yoon Ahn and Verbal were clear in their decision due to the issues of going global from Japan. “We know our limitations and we know our strengths and we needed that production help to take our vision to the next level.” With Claudio Antonioli, De Giglio and Burlon having a prophetic sense for trailblazers in the industry and the know-how to scale these brands, the Italian luxe-street fashion platform has been crunching numbers. Business of Fashion reported that New Guards Group generated $63 million in revenue and $27 million in profit in the third quarter of 2019 with projections of $80 million in revenue for the fourth quarter.

Regarding the acquisition by Farfetch through a cash-and-stock transaction worth $675 million, José Neves founder and Chief Executive stated: "New Guards is not a brand, they are not a Maison, they are not a conglomerate. They are absolutely best in class in terms of spotting the new stars of tomorrow.” While Farfetch justified the buy-out as a means to improve vertical integration, New Guards benefits from the partnership through e-commerce alternatives to their existing wholesale model. “One thing that we were really missing was the direct-to-consumer business in terms of online,” said De Giglio, who plans to launch Off-White and Palm Angels as the first two brands on the Farfetch website. For fledging street-luxe brands that lack the abilities to plan formulaic growth, the Farfetch-New Guards platform is a 360-degree solution, from production and wholesale distribution to direct sales.

In a time where luxury labels are infected by the fetishistic dogma to pursue street style and battle growing competition for retail shelf-space with their contemporary counterparts, NGG’s decision to explore direct-to-consumer avenues through Farfetch while maintaining their leadership in the streetwear category is a smart strategy, despite having resulted in stunned Wallstreet analysts last August. Safe to say, whether they want to be a conglomerate or not, New Guards Group is well on its way to becoming the Kering of luxury streetwear brands.

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