Coupang rescues Farfetch in $500m deal transforming the future of luxury etail
Farfetch, the beleaguered luxury fashion etailer, has been given a lifeline through a strategic acquisition by Coupang, a South Korean retail giant boasting a diverse portfolio.
This rescue operation comes in the wake of Farfetch grappling with speculated financial turmoil.
In a significant deal, Coupang, a prominent player listed on the NYSE, is injecting vitality into Farfetch by offering access to a substantial $500 million in capital. This financial infusion aims to sustain Farfetch’s operations, encompassing both its consumer-facing initiatives and the provision of cutting-edge technology to brands and retailers.
Speaking on the acquisition, Coupang’s founder and chief executive officer, Bom Kim, said: “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. “Farfetch will rededicate itself to providing the most elevated experience for the world’s most exclusive brands, while pursuing steady and thoughtful growth as a private company. We also see tremendous opportunities to redefine the customer experience for luxury clients everywhere.”
For Coupang, this strategic move positions the company as a front-runner in the luxury goods segment. Meanwhile, for Farfetch, the acquisition provides a strategic entry point into the lucrative South Korean market, renowned for having the highest per capita spending on personal goods worldwide.
In a statement, José Neves, Farfetch’s founder, CEO and chairman said: “Coupang’s proven track record and deep experience in revolutionising 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. “We are thrilled to be partnering with such a respected Fortune 200 company that is committed to investing in innovations that transform all aspects of the customer experience with Farfetch.”
Greenoaks, an investment firm with substantial financial acumen, played a pivotal role as Coupang’s investment partner in facilitating the acquisition.
The rescue comes on the heels of speculations about Farfetch’s potential delisting and privatisation, fuelled by concerns over dwindling stock prices. The postponement of Farfetch’s third-quarter results added further uncertainty, leaving prospective partner Richemont in a state of indecision regarding the stake acquisition in Yoox Net-a-Porter.
As Farfetch secures a new lease on life through the Coupang acquisition, the industry eagerly awaits Richemont’s response to this latest development, with hopes for a revitalised and prosperous future for the once-troubled luxury e-tailer.