South Korean online retailer Coupang has announced the acquisition of assets from the British luxury-focused platform Farfetch. Coupang will provide $500 million to Farfetch, which has recently faced significant financial challenges. Following the completion of the deal, Farfetch will become a private company.
“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,” said José Neves, Farfetch Founder, CEO and Chairman. “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.”
Farfetch’s valuation has plummeted by over 95% since its initial public offering (IPO) five years ago, reaching its peak success with a $24 billion valuation. In recent times, Farfetch has accumulated debts and teetered on the brink of bankruptcy. In late November, the company announced its decision not to release financial reports for the third quarter. Media reports suggested that Farfetch could be acquired by the founder of the retailer, Jose Neves.
On December 18, Farfetch’s stocks fell nearly 40% in over-the-counter trading, leading to the suspension of trading by the New York Stock Exchange. Coupang’s stocks also decreased by 3.5% following the announcement of the deal.
