FarfetchThe embattled luxury e-commerce platform that has spent months on the brink of bankruptcy has found its white knight: the retailer said Monday that cupangDescribed as South Korea's answer to Amazon, it would be acquired for $500 million.
London-based Farfetch was once hailed as the most dominant force in luxury fashion. It went public on the New York Stock Exchange in 2018, and as consumers and luxury brands flocked to the site, its value skyrocketed, reaching more than $23 billion at its peak in 2021.
But soaring costs and debt, a series of high-risk investments and a slowdown in the global luxury market sent the company's share price tumbling to a market value of around $200 million. Dollars. The struggles led to a desperate search for new investments by its founder and CEO, José Neves, a 49-year-old Portuguese businessman.
In cupang, South Korea's largest e-commerce retailer, Farfetch has found an alternative to bankruptcy that will allow it to continue operations. Coupang, which made its debut in the New York market in 2021, has e-commerce operations in markets such as South Korea, Taiwan, Singapore and India, and also offers food, payment and video streaming services.
Farfetch will become private and its shares will be delisted. As part of the deal, existing shareholders will be eliminated. Farfetch Stock fell 35 percent in premarket trading on Monday after the deal was announced.
“Coupang's proven track record and deep experience in revolutionizing commerce will allow us to offer exceptional service to our brands and boutique partners, as well as our millions of customers around the world,” said Neves, who will remain with the company in a unspecified paper.
Bom Kim, founder and CEO of Coupang, called Farfetch “a milestone in the luxury landscape” and a “transformative force in online luxury.”
“Farfetch will rededicate itself to providing the highest experience for the world's most exclusive brands, while pursuing continued and thoughtful growth as a private company,” he said in a statement.
Richemont confirmed in a statement on Monday that a deal for Farfetch to buy a 47.5 percent stake in rival Net-a-Porter from luxury goods group Richemont has been terminated.
Farfetch, which connects shoppers with independent boutiques and also offers e-commerce services for big brands and luxury retailers, sought to reassure its retail customers on Monday.
“Farfetch will continue to operate as normal, but with a stronger balance sheet and cash position,” the company said in an email, adding that its partners “will continue to work with the Farfetch team as they have for the past 15 years.” .
The deal caps a painful year for many former leading figures in luxury e-commerce. News over the weekend suggested that Matchesfashion.com… bought by Apax Partners in 2017 for around $1 billion — would soon be sold to Fraser Group, owned by British retail magnate Mike Ashley, for about 63 million dollars.
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