Farfetch Has Been Sold to South Korean E-Commerce Giant Coupang

In a deal that will provide Farfetch with $500 million USD in emergency funding.

Fashion 
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Farfetch has officially been sold to South Korean e-commerce giant Coupang in a deal that is expected to give the luxury retailer $500 million USD in a emergency funding. A statement earlier this week confirmed the business move and also noted that the deal is expected to be completed by early next year. By selling to Coupang, BOF hints that Farfetch is able to “narrowly avoid bankruptcy after a slowing luxury market, M&A missteps and high cost of debt imperilled the platform’s operations, risking ripple effects for partner boutiques and brands.”

Prior to the sale, there was a complex deal in the works that would see Richemont sell 47.5% of its YOOX-NET-A-PORTER stake to Farfetch. Now, that deal has been terminated, according to a person with direct knowledge of the matter. The sale to Coupang comes after weeks of searching for someone to rescue the luxury giant and secure them with enough capital to keep it operating. The fact that the white knight was an outsider instead of the many high-profile investors that Farfetch has had a relationship with shows just how dire the situation has become.

Farfetch canceled its scheduled quarterly results release on November 28 and told investors to disregard the prior financial forecasts. At the time, The Telegraph reported that Farfetch CEO José Neves was in the talks with top shareholders like Alibaba, Richemont and JP Morgan to potentially take the company private. However, those talks were stalled as Richemont quickly issued a statement that they were no longer injecting any more money into Farfetch. An Alibaba executive aso resigned from the marketplace’s board.

Coupang comes to save the day with deep pockets. The company went public in 2021 and became the biggest U.S. listing by an Asian company since 2014 at the time. Coupang is South Korea’s answer to Amazon and has reported $20.6 billion USD in net revenue in 2022. However, like Farfetch, it has yet to turn a profit with share prices down almost 75% since its 2021 IPO. Employees and vendors were assured by Neves when the deal was announced that business will be as usual at Farfetch. In an internal memo viewed by BOF, Neves told staffers that Farfetch will “continue to pursue our ultimate goal of becoming the defining tech platform for the luxury industry.”

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