New Guards Group Restructures Under Bankruptcy Protection Law in Italy
Two weeks after losing the license to distribute Reebok footwear and apparel in Europe, New Guards Group is filing for Chapter 11-style proceedings in Italy.
NGG, the Farfetch division that’s home to a host of brands and the licensee of Off-White, will undergo a restructuring and debt management process under Italian bankruptcy law.
The filing is known in Italy as a CNC, and offers troubled companies the time and space to restructure, and chart a path forward. It is not an insolvency procedure.
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An NGG spokesperson said the move is aimed at “avoiding a bankruptcy filing, and allows NGG to continue to operate its business with partners and customers.”
As reported, Authentic Brands Group terminated NGG’s Reebok license for Europe earlier this month after the two parties failed to agree on new terms. It is understood that NGG owes ABG royalty payments of around $300 million.
NGG, a division of Farfetch, is the owner of brands including Marcelo Burlon County of Milan, Palm Angels, Unravel Project, Heron Preston, Alanui, Peggy Gou, Ambush and There Was One.
NGG still holds the license for Off-White, the late Virgil Abloh’s brand that was purchased by New York-based Bluestar Alliance LLC earlier this year.
At one point it looked as if NGG was a takeover target. WWD reported earlier this year that Style Capital was potentially interested in purchasing the group, but it appears those talks fizzled. No other interested parties have emerged.
It is understood that Coupang’s latest moves are specific to NGG, and do not impact other Farfetch-owned businesses, such as Stadium Goods, Browns and Neiman Marcus, in which it has a minority investment.
As reported, Farfetch founder and chief executive officer José Neves raised eyebrows in the financial community when he acquired New Guards Group for $675 million in 2019. He had originally promoted Farfetch as a tech business and retail platform that did not hold stock.
After the purchase of NGG, Farfetch became a brand owner, licensee — and potential partner of third-party brands.
As recently as last year Farfetch created a new division known as NGG++, which was supposed to be the home for the Reebok business in Europe.
NGG++ was also expected to accelerate the business growth of all New Guards Group brands — and potentially outside labels — looking to expand into the sportswear and sneaker business.
But seven months later, with money running out and its valuation spiraling downward, those plans fell apart. Farfetch was nearing collapse when it was rescued by Coupang, which invested alongside the San Francisco-based firm Greenoaks Capital.
Coupang, a Fortune 200 company listed on the New York Stock Exchange, purchased Farfetch last December, pumped $500 million in emergency funding into it as part of a “pre-pack” administration process, and took over operations fully in February.
Since then Coupang has been sharpening Farfetch’s technology, and focusing on the core business: the fashion e-commerce platform.
