Far from the euphoric highs of the US$25 billion (AU$37 billion) market capitalisation, it achieved just two years prior, Farfetch — touted, for over a decade, as “the global platform for luxury” — sold to Coupang yesterday, to the comparatively modest tune of around US$500 million (AU$740 million).
Veteran fashion journalists have described the development as a “lifeline” for the online fashion marketplace; which has weathered a succession of setbacks since last December, when the company held its first Capital Markets Day since listing circa 2018.
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Farfetch’s share price fell more than 35% shortly thereafter, with experts attributing negative market sentiment to uncontrolled cash burn and a range of convoluted “non-core acquisitions.”
Now, as part of a “pre-pack administration” deal (in which businesses are sold before the intervention of company liquidators) Korean firm Coupang has agreed to inject half a billion into Farfetch; following the beleaguered fashion platform’s attempts to enlist aid from Richemont Group and Alibaba — both unsuccessfully.
A vast, publicly listed entity primarily operating in South Korea — where it presides over video streaming, delivery services and the country’s largest online marketplace — Coupang entered into negotiations to acquire Farfetch relatively late in the picture.
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Bom Kim, the company’s Founder & CEO, stated he saw “tremendous opportunities to redefine the customer experience” for Farfetch’s end-consumers and retail partners.
Interestingly, one of the primary conditions of the deal has been Farfetch’s removal from the NYSE and subsequent re-privatisation. This, in theory, would put the company’s diverse portfolio of assets at Coupang’s disposal. At the time of writing, this includes: London retailer Browns, a US$200 million (AU$295 million) stake in Neiman Marcus, and the controversial sneaker marketplace Stadium Goods.
