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Violet Grey and Farfetch Talks Heating Up: Sources

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Talks are heating up between beauty company Violet Grey and luxury platform Farfetch.

WWD first reported that the two sides were considering a potential acquisition or partnership in April and multiple sources said the preliminary details are being wrapped up and that due diligence is beginning.

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The exact nature of the talks could not be learned, but Violet Grey — as well as its founder Cassandra Grey — could prove to be a vital link to the beauty industry as Farfetch looks to expand into the sector next year.

Both Grey and a Farfetch spokesperson declined to comment on Tuesday.

Beauty has been in the works for some time at Farfetch, which has become an e-commerce force to be reckoned with, connecting high-end boutiques and brands with customers and building the groundwork to offer more and more services, from a connected physical store to advertising to fulfillment.

The company already has a mega partnership with Alibaba and Compagnie Financière Richemont — and could keep building on that with a separate deal in the works that could see Farfetch also link up with Richemont’s Yoox Net-a-porter business.

While any deal with Violet Grey would be on a smaller scale, the potential in beauty is big and Farfetch has made its approach to the sector a significant part of its planning.

Chief customer officer Stephanie Phair updated Wall Street analysts on Farfetch’s beauty effort last month, saying the company would “offer a mix of both large and indie brands in the makeup and skin care space, and continue to ramp up our conversations as we carry on building the technology capabilities for this exciting opportunity.”

“We intend to enter beauty in an Only on Farfetch way, with a very compelling consumer proposition, generating excitement through storytelling between fashion, beauty and innovation to appeal to fashion lovers in an unrivaled way,” she said.

And José Neves, Farfetch’s founder, chairman and chief executive officer, said the move into beauty would feed into another key initiative — advertising.

“We’re opening to the beauty universe, right, where there’s a tremendous advertising, beauty advertising opportunity there,” Neves told analysts. “So the investments will be really around ad tech, expanding the inventory across our website and app and also in the team to really — to really drive this [advertising] business.”

Beauty works for Farfetch in several ways. The category brings more selection to the platform’s 3.6 million active users, who deliver an average order value above $600. If the category takes off, Farfetch becomes that much more important to the fashion brands that are also beauty brands. And the business creates more advertising opportunity in addition to new potential in distribution and connected stores and the rest of Farfetch’s services.

Adding Violet Grey could also help give the platform more cred with the beauty bunch and bring some extra content savvy into the mix. Amazon was said to be considering a similar approach and was said to have held talks with Violet Grey in 2017, although a deal never materialized.

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