Online luxury retailer Farfetch sold to Coupang in £396m rescue deal
Farfetch has been bought by the South Korean e-commerce group Coupang as part of a last-minute rescue deal for the struggling online luxury retailer.
The UK-based but US-listed firm will receive $500m (£395.6m) in capital funding to continue its operations and will have its shares delisted.
A partnership between Seoul-based Coupang and the investment firm Greenoaks will acquire Farfetch through a pre-pack administration, which involves selling all or parts of a business in severe financial difficulty.
Farfetch has had a torrid time since it floated in 2018, with its value plummeting from around $23bn to $250m. The deal will wipe out Farfetch’s shareholders, which include founder and chief executive Jose Neves, who holds a 15 per cent stake.
Earlier reports had suggested a take-private deal was looming, with the company facing administration before Christmas.
“Farfetch is a landmark of the luxury landscape and has been a transformative force in demonstrating that online luxury is the future of luxury retail,” said Bom Kim, founder and chief executive of Coupang.
José Neves said: “Coupang’s proven track record and deep experience in revolutionizing commerce will enable us to deliver exceptional service for our brand and boutique partners, as well as for our millions of customers around the world.”
Cartier-owner Richemont said in a separate statement it would pull out of a deal to sell off its online fashion and accessories business to Farfetch following the announcement.
Farfetch has more than four million active users and connects wealthy customers to luxury boutiques around the world. Demand for the e-commerce giant’s products boomed during the pandemic. However, a slowdown in luxury spend has left the company in the lurch ever since.