*An incubator for retail technology; the ‘Store of the Future’By *
Online retailer Farfetch has purchased Browns, an iconic London fashion boutique known for introducing new fashion labels and pioneering bridal and menswear since the 1960s.
Farfetch plans to operate the store as an incubator for retail technology, in a project the company’s founder and chief executive Jose Neves calls the “Store of the Future.” The idea is to test new digital concepts including ways to manage inventory and evaluate shoppers’ desires, all while continuing to sell to Browns’ clients in fashion and luxury.
The sale marks the end of an era for the family-owned Browns and launches a project that could have global implications give a global reach to independent fashion boutiques, which have been struggling to compete against online sellers and luxury brands’ own stores.
Farfetch has made waves in fashion since launching in 2008. The site turns roughly 300 fashion boutiques around the world into a virtual department store, allowing shoppers to buy online from any member store. It has become a popular way for shoppers to locate hard-to-find or little-produced runway looks and sizes, and it has helped many small boutiques find a global following.
The idea to buy Browns took hold when Farfetch formed its Store of the Future innovation unit, says Mr. Neves.
Only about 6% of luxury fashion sales happen online, globally, (about 12% in the U.S.), Mr. Neves says. But without physical stores of its own, Farfetch was unable to test some of its marketing and business management ideas.
“We want to be the pioneers,” says Mr. Neves, who directly approached Burstein family, which owned Browns until the sale closed last week, without employing investment bankers to broker the deal.
Browns is known for identifying new fashion talent. The store bought up the design school graduation collections of now-famous designers including John Galliano andHussein Chalayan and put them in its windows.
But the store has lately sought cash to expand. The Bursteins had rejected offers from venture capitalists because they “will put money in but they don’t have the knowledge and skills to offer,” says Simon Burstein, whose parents bought the store about 45 years ago.
“This deal is accelerating us into a completely different level,” he said in an interview, adding that Farfetch offered payment and expertise to expand Browns internationally. Farfetch has no current plans to open more Browns stores.
The companies declined to divulge the amount of the sale, but Mr. Neves confirmed that it was for a mix of cash and shares in Farfetch. Mr. Burstein is resigning as chief executive but he and his sister Caroline Burstein will take seats on Brown’s soon-to-be-formed board of directors, which will oversee the store’s operations.
“We do not want to change the DNA of Browns at all,” said Mr. Neves. “The idea is to evolve it evolution, not revolution.”
Holli Rogers, formerly top buyer for Net-a-Porter, will become chief executive. Ms. Rogers brings an extensive knowledge of luxury brands as well as the global taste for fashion to the store. “It’s all about the product and keeping it cool,” she said. “It’s taking what they have and building on it.”
Many changes will be largely invisible to shoppers, says Sandrine Devaux who was hired from the Harvey Nichols store chain to run the ‘Store of the Future.’ Ms. Devaux plans to employ RFID, or radio-frequency communication, and NFC, or near field communication technologies, by using chips on garments to quickly locate them and get them to consumers. Mobile payment technology should allow someone to shop from their home or hotel room. Ms. Devaux is interested in applying artificial intelligence to predict consumer behavior, even taking into consideration, for instance, the weather and how a rainy day impacts desires.
Mr. Burstein, who is 63, said he’ll soon be looking for another job after taking a “big box of Kleenex” to the store when he informs employees of the sale. “I’ve always wanted to internationalize Browns,” he said. “Of course it hurts. It hits you in the gut. We’ve put our love and everything in it. It’s handing over a baby.”
- CHRISTINA BINKLEY http://www.wsj.com/