June was a very busy and positive month in London on many fronts. London Tech Week 2019 featured four days of events centred around ‘uniting tech and talent in a world-class hub of innovation’. I kicked off the week with a briefing at Local Globe in their new offices, at Phoenix Court, right in the heart of the Knowledge Quarter (KQ) of London. It was incredible to see students from the local primary school attending the event, alongside founders of tech start-ups and partners of VCs from all over the world. Founders Saul and Robin Klein have made LocalGlobe an inspiration to the community of King’s Cross through its commitment to teaching and advising students, up to 18 years of age, on careers in tech.
London’s Knowledge Quarter is now defined as the area within a one-mile radius of King’s Cross station. It houses, what is considered, the densest concentration of scientific and knowledge-based organisations anywhere in the world. KQ is basically a consortium of many different organisations with one thing in common: they are all actively engaged in advancing and disseminating knowledge. There are now about 100 academic, cultural, research, scientific and media organisations in the area, within which sits the British Library, The Crick Institute, UCL, The Alan Turing Institute and the Wellcome Trust. Global brands like Google, Universal Music and Diesel share the hub and businesses of all sizes are being drawn to moving their offices into the location. This area is creating an ‘incubator for the UK’ and in recent years the Knowledge Quarter has helped to drive the redevelopment of former railway lands to the north of St. Pancras and King’s Cross.
Heatherwick Studios equally has its campus in the KQ, and Thomas Heatherwick and his team were tasked with designing a space for shops, restaurants and recreation. Heatherwick Studio created Coal Drops Yard by converting and extending two Victorian industrial buildings that were built to store and transfer coal, delivered by rail from Northern England, across London. Thomas explains, “They are connected by a sinuous roof, designed to make it look like the old buildings were physically stretched towards each other.”
On-going developer and investor interest in the area in part reflects its location at the heart of vibrant global London. The KQ is also a magnet for businesses because of its highly skilled workforce, linked to institutions that undertake world-leading scientific research. The quality of place-making and the burgeoning culture is attracting best-in-class talent from all over the world. Key to the KQ’s success is an integrated transport network, with connections to outer London, major cities in the UK and mainland Europe via Eurostar. This all helps to access a huge pool of skilled labour and all of these factors add up to giving the area a competitive edge against other cities the world-over.
A week later, still in June, I found myself moderating a session at the British Fashion Council Fashion Forum, held at The Ned. My session, entitled “The People Puzzle: How new business models are affecting culture”, facilitated a discussion on the new ways that customers shop and the knock-on effect that this is having on the talent that organisations now need. Digital transformation and what it now takes to ensure businesses survive were at the heart of our debate. The real inspiration of the day took place later, when John McPheters, who flew in from New York, revealed the story behind Stadium Goods, a company that he co-founded only four years ago.
Before starting Stadium Goods, John was vice president of business development and ecommerce of Flight Club, a sneaker business, with three stores in the USA and an online business. Flight Club describes itself as a cultural hub for sneaker enthusiasts. I remember the first time that I went to the LA store – it was retail theatre at its best; staff and customers talking trainers, with the latest shoes on display; as well as collectors’ pairs, some priced at around $6,000! John had previously worked as digital director at Team Epiphany, which specialises in culturally relevant, experiential brand strategy. Here he looked after the digital and social business development for companies like Nike, Electronic Arts and Timberland.
John and his business partner, Jed Stiller, co-founded SM Ventures in 2012, a VC firm focused on ecommerce and technology-based lifestyle investments. They backed an array of different concepts, including Blades.com, a 25-year-old skateboard and lifestyle apparel retailer, and Swarm Mobile, a business that provides shopper analytics and omni-channel marketing, which they sold to Groupon in 2014. All of this experience paved the foundations for launching Stadium Goods, which began as one store in New York, with an excellent online platform in 2015.
Stadium Goods is a premium sneaker and streetwear marketplace selling the most sought-after footwear, apparel and other hard-to-find items on behalf of their sellers. Each product is 100% authentic and brand new, allowing them to transact seamlessly around the world. John and Jed were committed to providing the best customer and consignment experience possible, which helped to secure $4.6m in venture funding from Forerunner Ventures and the Chernin Group, before LVMH Luxury Ventures acquired a stake for an undisclosed sum. Late last year, to nobody’s surprise, Jose Neves and his team at Farfetch acquired the company outright for $250m.
Once they had the basics right and the funding in place, they were able to expand their distribution through companies like eBay, Zalando, Amazon and Alibaba. They now also have a distribution deal with their owners, Farfetch, to sell an exclusive line of sneakers. When asked why Farfetch after a relatively short time, John said: “Farfetch’s best-in-class cross-border logistics and technology, as well as their luxury prowess, scale and customer base, was part of the company’s appeal.”
Stadium Goods is enjoying excellent global sales growth and is part of a larger luxury re-sale market, which is estimated to be worth about $25bn. Growth in this sector, to a large extent, is due to dedicated web platforms that draw a younger customer to more accessible luxury goods.
There have been a number of deals similar to the Stadium Goods-Farfetch one in the last few years, with Richemont acquiring the second-hand watch selling platform Watchfinder in 2018 to supplement its own luxury watch brand business. Analysts stated, at the time of the news, that the purchase was the latest sign that luxury power players were looking to tap into a fast-growing market for pre-owned products.
VC-backed business StockX, the Detroit-based sneaker resale market, announced last year that it had raised $44m in funding from various investors, including Marc Benioff, the Chair of Salesforce. Just before that, Julie Wainwright’s The RealReal, which sells authenticated luxury goods, had brought in a Series G financing round, raising The RealReal’s funding to a total of $288m.
The world is not standing still and what I learnt in June is that neither is London. Prime Ministers may come and go, and the way we do business may be changing, as many retailers can testify, but the winners will always be the creative disruptors who make this one of the greatest cities in the world.