New and used sneakers, especially vintage and limited-edition models, continue to be cult objects. They are increasingly sought after by luxury goods customers all over the world who shop on websites like Farfetch, the leading internet platform for luxury goods that went public successfully a few weeks ago (Shoe Intelligence Vol. 20 n°19+20 of Oct. 20).

Using some of the proceeds from the IPO, Farfetch has signed a definitive agreement for the acquisition of Stadium Goods, described as the biggest internet marketplace for new and used premium sneakers and streetwear, for an enterprise value of $250 million, payable in cash and shares.

The move is a significant tribute to the growing importance of lifestyle sneakers and the premium sportswear market, which has been estimated by Bain to have generated sales of $70 billion worldwide in 2017.

Founded three years ago, Stadium Goods has been working online and offline, with two physical stores in New York City. It has been trading on Farfetch's marketplace since last April. Its acquisition is expected to trigger major synergies in databases, cross-border logistics and technology, expanding Stadium Goods' international reach.

Goldman Sachs acted as exclusive financial advisor in the transaction, which is expected to be completed in the first quarter of 2019. Prior to Farfetch's investment, it raised $4.5 million in a funding round led by Forerunner Ventures in January 2017. Last February, LVMH Luxury Ventures had acquired a minority stake in the company.

Stadium Goods will continue to work as an independent subsidiary of Farfetch under its current management, led by John McPheters and Jed Stiller, who founded the company in New York's Soho district in 2015, reselling rare sneaker models at prices ranging up to several thousands of dollars. The company reportedly generated more than $100 million in gross merchandise value in 2017.

It's unclear at this stage whether Stadium Goods will be permitted to continue to work with other big marketplaces like Amazon, eBay, Zalando and Alibaba as in the past. As we previously reported (Shoe Intelligence Vol. 19 n°17+18 of Sept. 14, 2017), Zalando struck its first transatlantic retail alliance last year by extending its partnership program with retailers to Stadium Goods. After a pilot phase in Germany, when only German customers were able to order the product range offered by Stadium Goods, a roll-out through Europe was expected to follow.

Previously, in 2016, Zalando bought Kickz, a German-based chain of streetwear and sneaker stores that addresses a similar type of customer, to help secure the availability of the latest sneaker releases.