José Neves: the Buddhist transforming luxury fashion

José Neves cornered the market in building bespoke websites and apps for boutique fashion brands and retailers. That put him in a sweet spot when the pandemic arrived.

“The essence of Zen is: be here now,” says José Neves. “In a crisis, that’s really useful because you train your mind to be aware that external situations around you [are] going to pass.” He’s had his share of hairy moments. But for the moment “now” must be a sweet place for the Portuguese entrepreneur who, fittingly for someone who got his start in shoes, seems to have the luxury fashion industry at his feet. Neves, 47, runs Farfetch, a digital platform hosting a collection of independent boutiques and designer labels that has thrived in the pandemic. He’s credited with keeping many independents afloat when shops closed. That was just the start, says Forbes. Having cornered the market in building bespoke websites and apps in the sector, the London-based, New York-listed outfit has placed itself “at the centre of the online luxury digital revolution”.

Reimagining the shopping trip

Admirers credit the “visionary” Neves’s unique pedigree of fashion smarts and tech expertise, and a knack for bridge-building that a politician might envy. An unlikely alliance, sewn together last November with the aim of cracking the Chinese market, succeeded in uniting Alibaba, Richemont and Artemis. All are rivals in the ecommerce wars (Richemont, for instance, owns Farfetch’s biggest e-tail competitor Yoox Net-a-Porter), “yet all three are placing their bets on Neves’s ability to reimagine how we shop”. Forbes makes comparisons with Jeff Bezos, but Neves – a self-styled Buddhist “by philosophy, not by religion” – dislikes the comparison, noting that Amazon set out to trash the competition; Farfetch’s raison d’être is to nurture the entire eco-system. Given that lofty goal, it’s perhaps not surprising that the outfit has yet to make a profit.

Growing up in Porto in Portugal, where his grandfather ran a shoe factory, he hated fashion, preferring to spend his time with his ZX Spectrum computer, “coding, coding and more coding”. Still, he could never quite shake off his heritage. While studying economics at the University of Porto he teamed up with Cipriano Sousa (now Farfetch’s chief technology officer) to start a software house catering to the many shoe factories in the region. “Neves came to see fashion as a passport to the wider world,” says The Robb Report. He took up shoemaking himself and, in 1996, launched a trainer brand, Swear, from “a shoebox of a store” in London’s Covent Garden. Building the website a year later, he had a light-bulb moment. “I knew that fashion was going to be transformed by the internet.”

Playing the long game

It took Neves 11 years to translate that instinct into Farfetch, via a series of other ventures. In 2007 he arranged a showroom during Paris Fashion Week for an assortment of small British shops and labels. It was a short step to offering them an online marketplace. “José played a long game,” an early backer told the Financial Times. “He thought the big brands would never talk to us until the boutiques talked us up to them. And he was right.” A key moment came in 2017 when Kering-owned Gucci signed up. The following year, Farfetch staged a flashy Wall Street initial public offering valued at $6bn.

Investors have had quite a ride, says the FT. In 2019 the “shares hit rock-bottom” due to fears that Farfetch was “little more than an overhyped ecommerce player”. But the pandemic “brought a reckoning”. Sales have jumped (it is even whispered that profitability may be in sight), but nothing like the share price, which surged by 475% in 2020, says The Robb Report. Investors, it seems, are still sold on the notion that Neves has emerged as “luxury’s lodestar” for navigating a “new world order”.

Recommended

The charts that matter: more pain for goldbugs
Economy

The charts that matter: more pain for goldbugs

Gold investors saw more disappointment this week as the yellow metal took a tumble. Here’s what’s happened to the charts that matter most to the globa…
18 Sep 2021
The new social-care levy: an unfair tax that protects the “assetocracy”
National Insurance

The new social-care levy: an unfair tax that protects the “assetocracy”

The government’s regressive social-care levy will make Britain’s tax system even more complex. Root-and-branch reform is long overdue.
18 Sep 2021
Kieran Heinemann: the history of shareholder capitalism
Investment strategy

Kieran Heinemann: the history of shareholder capitalism

Merryn talks to Kieran Heinemann, author of Playing the Market: Retail Investment and Speculation in Twentieth-Century Britain, about the history of t…
17 Sep 2021
Cryptocurrency roundup: litecoin blunder, cardano update and bitcoin mining in Laos
Bitcoin & crypto

Cryptocurrency roundup: litecoin blunder, cardano update and bitcoin mining in Laos

Saloni Sardana looks at the week’s biggest stories in the world of cryptocurrencies.
17 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021