Far from the euphoric highs of the US$25 billion (AU$37 billion) market capitalisation, it achieved just two years prior, Farfetch โ touted, for over a decade, as โthe global platform for luxuryโ โ 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 โlifelineโ 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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Farfetchโs share price fell more than 35% shortly thereafter, with experts attributing negative market sentiment to uncontrolled cash burn and a range of convoluted โnon-core acquisitions.โ
Now, as part of a โpre-pack administrationโ 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 platformโs attempts to enlist aid from Richemont Group and Alibaba โ both unsuccessfully.
A vast, publicly listed entity primarily operating in South Korea โ where it presides over video streaming, delivery services and the countryโs largest online marketplace โ Coupang entered into negotiations to acquire Farfetch relatively late in the picture.
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Bom Kim, the companyโs Founder & CEO, stated he saw โtremendous opportunities to redefine the customer experienceโ for Farfetchโs end-consumers and retail partners.
Interestingly, one of the primary conditions of the deal has been Farfetchโs removal from the NYSE and subsequent re-privatisation. This, in theory, would put the companyโs diverse portfolio of assets at Coupangโs 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.
