Luxury fashion marketplace Farfetch has been bought by Seoul-based ecommerce firm Coupang, with $500mn (£395mn) in emergency funding provided to save it from bankruptcy.
There were reports on Sunday that business management consultant AlixPartners had been lined up as administrators. Farfetch had faced a slowing luxury market and high cost of debt.
Furthermore, Farfetch’s complex deal with Richemont to acquire a 47.5% stake in Yoox-Net-a-Porter, mostly in shares, has been terminated, according to a person with direct knowledge of the matter. Richemont has yet to issue comment.
Earlier this year, the RetailX European Luxury 2023 report profiled Farfetch. It tracked how the marketplace has more than 1,400 sellers on its platform and was constantly reaching out to brand owners with the offer of hosting their wares on its site. This direct approach was designed to give smaller players a chance to leap into ecommerce with minimal outlay.
Being online-focused, the company saw a boom in sales and traffic across 2019 and 2020, during pandemic lockdowns. This growth has tailed off as the market has normalised, dropping 18% in 2021.
Last year, it effectively partnered with luxury giant Richemont, buying a 47.5% stake in YOOX Net-a-Porter (YNAP), a hybrid of luxury clearance seller and shoppable digital magazine. At the time, the move was designed, in the words of Richemont chairman Johann Rupert, as a step towards his ambition of an “independent neutral online platform for the luxury industry” that would attract both high-end brands and their customers.
Yet the deal attracted the attention of the UK’s Competition and Mergers Authority (CMA), which deems it to be effectively a merger.
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