Chanel invests in London tech startup Farfetch

French fashion house Chanel has bought a stake in London-based fashion retail platform Farfetch, as the two companies plan digital projects together.

Chanel is set to introduce an “augmented retail” element to its boutiques with the help of Farfetch. This will include elements of ultra-personalisation, using Farfetch’s digital know-how to give insights on customer preferences.

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“We believe the future of luxury fashion retailing hinges on reinventing the customer experience – both online and offline,” explained Farfetch founder Jose Neves.

“We call this vision ‘Augmented Retail’ – taking the magic of the physical boutique experience and bringing it together with the advantages of online and digital services. We have been investing more than anyone in technology and consumer insights to make this vision a reality.”

The deal comes just a few days after Farfetch launched partnership with Burberry, bringing the brand’s products to 150 countries.

The company also sold a stake to Chinese e-commerce giant JD Williams last year.

Its string of activity has suggested to industry observers that Farfetch is gearing up for an initial public offering, estimated to be worth as much as $5bn (£3.6bn).

This would increase the competition with Farfetch’s main rival Yoox Net-a-Porter, from which it poached Net-a-Porter founder Natalie Massenet, who quit following the Yoox takeover.

But Yoox Net-a-Porter is on track to leave the public market, after Cartier owner Richemont made a €2.7bn offer to take full control of the company.