Chanel buys stake in Farfetch for digital push

French couture house Chanel has taken a minority stake in London-based online retailer Farfetch, the companies said on Monday, as part of a tie-up to develop digital services such as chats to connect the label's clients with store assistants.

Luxury goods companies worldwide are trying to expand their digital services to court younger or more tech-savvy clients.

Privately-owned Chanel, famed for its tweed suits and quilted leather handbags, has been an outlier in the industry push to move more shopping online by deciding not to roll out web sales of its clothing and leather goods.

Under the new deal, the label will not sell its wares through Farfetch but would work with the platform in coming years on digital innovations linked to customer services, said Bruno Pavlovsky, Chanel's fashion president.

These could include smartphone applications allowing people to flag their preferences and sizes online before entering a store, meaning assistants can cater to their needs, or help them locate an item spotted in a magazine for instance, he said.

"This is about how to enrich our relationship with our customers," Pavlovsky told Reuters, adding that Chanel was not trying to take a "Big Brother" approach of tracking clients but giving those who wished it more tailor-made assistance.
He did not give any financial details about the tie-up.

Farfetch has long been tipped for a stock market listing, and investment banks were recently pitching to work on a U.S. flotation later this year, sources said in January.
Farfetch's other investors include Chinese online retailer JD.com, French investment company Eurazeo and Singapore state investor Temasek.

The online retailer's shopping platform connects buyers to luxury fashion items from more 700 boutiques worldwide. The firm has also invested in developing digital functions for stores, which can be adapted to suit its partners.

Britain's Burberry said on Thursday it would team up with Farfetch.

"The challenge for our luxury industry is that our clients are used to ultra-personalised experiences," Farfetch's Portuguese founder and Chief Executive Jose Neves said. "When you walk into a store, people don't know you."

Chanel already offers select clients some digital support but wants to make this more widely available, Pavlovsky said, adding the firm would start testing new services this year.
The brand has close to 200 stores. It sells cosmetics, eyeglasses and perfumes online, but says releasing other items on the web would make them less exclusive.
Rivals such as LVMH's Louis Vuitton, Kering's Gucci or Hermes have taken a different tack, chasing sales growth by selling more online.