U.K.-based Farfetch
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In the acquisition announcement Coupang, which is headquartered in Seoul and Seattle, said that its “operational excellence and innovative logistics” combined with Farfetch’s leading role in the luxury ecosystem will “drive exceptional experiences for customers, boutiques, and brands across the world”.
“Coupang is also uniquely positioned to unlock Farfetch’s tremendous value for the vast personal luxury goods segment in South Korea, which has the world’s highest per-capita spending on personal luxury goods,” the company said.
The move was announced after a race to secure new capital just two weeks after it was reported that Farfetch founder Jose Neves was in talks to take the company private after a disastrous slump as a public company.
Backed by luxury goods group Richemont, Farfetch floated in 2018 and was at one stage valued at $23 billion. On closing last night, it had a market value of just $254.2 million.
Richemont had already said that it would not invest additional money into Farfetch, which last month delayed the announcement of its quarterly results.
Its shares went into freefall in mid-August and plunged over 50% on November 28 when the company postponed its quarterly earnings report, saying that prior financial guidance “should no longer be relied upon”. Its value has fellen 86% over the current year.
Recently, Moody’s
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Coupang Acquires Farfetch
“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 & CEO of Coupang. “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.”
“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,” added Neves. “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.”
Global investment firm Greenoaks is Coupang’s investment partner for the deal.
Coupang offers a variety of services, including same-day and dawn delivery of merchandise, delivery of prepared foods through Coupang Eats, fintech through Coupang Pay, and video streaming through Coupang Play. Coupang is officially headquartered in the U.S., with operations and support services performed in markets including South Korea, Taiwan, Singapore, China, and India and it is the Asian markets in which it is likely to target growth.
Farfetch Pandemic Winner
Farfetch was among the big winners from the pandemic as online shopping boomed, but has since floundered and continues to be loss-making, with its share price reflecting growing concerns over its viability.
It was founded in London in 2007 as a marketplace for luxury boutiques from around the world and currently services more than 190 countries. In recent weeks Farfetch had initiated a process to sell a number of subsidiaries including luxury retailer Browns.
It is understood that it will now not complete the acquisition of a stake in Yoox Net-a-Porter, another online fashion player.
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