In 1993, entrepreneur Jose Neves believed he was condemned to lead a dual life, torn between his passions for fashion and technology. Starting his first business at the age of 19, the tech-savvy Portuguese native sold software in floppy disks, unaware of how just how quickly the world was about to change.
“In the 1990s, the fields were completely separate, and now they’re blending into one,” he tells an audience at a Portuguese Embassy event in London. In 2007, capitalising on a gap in the market, Mr Neves founded a company that would come to be valued at more than $1bn and run facilities in more than 35 countries: online fashion platform Farfetch.
“I am from the north of Portugal where there is a huge textile cluster, so fashion was where my natural customers were,” says Mr Neves. “I also have some family roots – my father had a shoe factory. When I was 22, I fell in love with fashion. It was so cool, so creative and brings together people from all over the world.”
Creating a platform
Bringing together people from around the world, as it turns out, is exactly what Farfetch was created to do. “It was quite clear in 2007 that high-end fashion was working online,” says Mr Neves. But it was also evident, he adds, that small independent boutiques were unable to take advantage of this boom. “All of these hundreds of thousands of amazing brands will never be able to run a global commerce operation. So the industry and the community really need a platform, and somebody has to build one,” he says.
Headquartered in London, Farfetch currently connects shoppers to more than 500 luxury boutiques, offers services in 10 languages and ships to customers in 190 countries, according to business magazine Fast Company. The ability to work with family-owned third- and fourth-generation businesses and connect them to a global market was one of his proudest achievements, according to Mr Neves. “The fact that this platform exists, where people can access a hugely inspirational community from the comfort of their homes, is very good for these boutiques.”
But the going was not easy in the early years, as Mr Neves had the luck of launching his business on the eve of the 2008 financial crisis. “We were not able to raise funding because investors were scared of the environment at the time. Between 2007 and 2010, we were raising series A funding with our own money. That created a discipline many start-ups don’t have today,” he says.
The value of the carrot
With 1600 employees worldwide, management is very important in furthering Farfetch’s vision. When asked if his management style was ‘carrot’ or ‘stick’, Mr Neves says: “I’m more carrot. We’re very values driven as a company and the management style is very loose. We let people make their own decisions, so people can work the way they want. If they want to come in at 10am instead of 9am, or work till 1am or use the nap room, they can.”
Reviews for Farfetch on Glassdoor.com, a website for anonymous employee and company reviews, show a strong four out of five stars for employee experience, with comments such as “great workplace vibes”, “friendly environment” and “a good place to grow fast”.
For Mr Neves, there is big value in starting small. A key part of his vision of a virtual boutique marketplace was to preserve the “bricks and mortar” identity of the independent retailers. So while major luxury brands such as Valentino and Givenchy make up the larger part of Farfetch’s revenue, the vast range of merchandise offered by hundreds of other less-well-known businesses is what gives the company its broad and unique appeal.
In June this year, US mass media company Condé Nast announced a new “global content and commerce partnership” with Farfetch. The Portuguese start-up replaced previous Condé Nast acquisition e-commerce platform Style.com, whose URL now redirects automatically to Farfetch’s website.
“It's no secret that I have believed in the importance of combining content and commerce in order to elevate the digital shopping experience,” Natalie Massenet, Farfetch’s non-executive co-chair and founder of rival e-commerce site Net-A-Porter, wrote in a social media post. “And thanks to Farfetch’s brilliant business model we don't have to create the content, we can link to it.”
In 2015, Farfetch won accolades for CEO of the Year and Excellence in General Management by the Digital Masters Awards, and in 2014 won Best Fashion Start-up by the European Tech Start-up Awards. Mr Neves aims to take on 2000 employees by the end of 2017.
“Ninety-three percent of high-end luxury fashion sales happen in traditional brick-and-mortar shops, and 7% online,” he says. “We believe that brick-and-mortar shops are going to be the majority of the experience, but they won’t be the same shops you have today. Technology will improve the customer experience inside the shop, and we want to be pioneers in that.”
In April, the company launched an event called FarfetchOS, during which it introduced the ‘Store of the Future’, where a universal log-in allows sales associates to see the customer’s shopping profile in order to tailor their experience to their preferences. This essentially allows boutiques to collect data from shoppers in store, similar to a website collecting consumer data online.
“It’s really about enhancing the human side of it, because shop assistants should not be ‘shop assistants’ any more,” says Mr Neves. “They should be shop influencers and storytellers. Things like this can really change retail – and then it’s a much bigger game.”