The Owner of the Off-White License, Palm Angels, and More Is Filing for Bankruptcy Proceedings in Italy
New Guards Group is filing for Chapter 11-style proceedings in Italy, just two weeks after losing the license to distribute Reebok products in Europe. NGG, a division of Farfetch, is the home to a variety of brands and holds the license for Off-White. The company is currently undergoing restructuring and debt management under the Italian bankruptcy law.
Leaders of NGG are strategizing optimal ways to effect a successful financial restructuring and determine the proper course of action for the business. The filing in Italy is known as a CNC, an essential step that allows the company the necessary time and resources to identify and implement the best solution.
The CNC is not an insolvency proceeding and NGG will continue to operate during the process. Neither NGG, Farfetch, nor its usual owner Coupang were available to give an official comment.
Earlier this month, NGG’s Reebok license for Europe was seized by Authentic Brands Group after failing to agree on new terms. It is believed that NGG owes ABG around $300 million in royalty payments. In addition to Off-White, NGG owns brands such as Marcelo Burlon County of Milan, Palm Angels, Unravel Project, Heron Preston, Alanui, Peggy Gou, Ambush, and There Was One.
The license for Off-White, the brand created by the late Virgil Abloh, still belongs to NGG. Off-White was bought by the New York-based company, Bluestar Alliance, earlier this year.
At one point, NGG was considered a potential takeover target, with Style Capital expressing interest. However, these discussions broke down, and no other interested parties have come forward since. Coupang’s recent actions pertain to NGG only and do not affect other Farfetch-owned businesses such as Stadium Goods, Browns, and Neiman Marcus.
In 2019, Farfetch CEO José Neves surprised many when he gained control of New Guards Group for $675 million. Neves had previously promoted Farfetch as a tech business and retail platform without holding stock. The purchase of NGG turned Farfetch into a brand owner and licensee, which could potentially partner with third-party brands.
During the last year, Farfetch created a new division, NGG++, intended as the hub for the Reebok business in Europe as well as driving the business growth of all New Guards Group brands. However, after seven months, the plans fell through as resources drained and valuation dropped. With collapse near, Farfetch received aid from Coupang and Greenoaks Capital, who purchased Farfetch and invested $500 million as emergency funding.
Coupang, a Fortune 200 company listed on the New York Stock Exchange, acquired Farfetch last December, took over its operations by February, and has been enhancing the technology of Farfetch and emphasizing the core business, the fashion e-commerce platform, since then.
