South Korea's leading online marketplace, Coupang, announced its acquisition of the luxury fashion platform Farfetch in a pivotal $500 million deal. Farfetch, once a celebrated name in the luxury e-commerce sector, was on the verge of bankruptcy after a series of high-risk investments and a downturn in the global luxury market.
The company's valuation had plummeted from over $23 billion in 2021 to around $200 million, leaving it dire need of a financial lifeline.
In a press release, Farfetch Limited announced the resignation of its independent board members and all committees:
"Dana Evan, David Rosenblatt, Diane Irvine, Gillian Tans, Stephanie Horton and Victor Luís effective immediately. The resignation of the Independent Directors is not the result of any disagreement with Farfetch Limited or its operations, policies or practices."
"They leave with the sincere thanks of Farfetch Limited for all they have contributed to the Board and Farfetch Limited, along with Farfetch Limited’s best wishes for the future."
"The Independent Directors wish Coupang, Greenoaks and the Farfetch business every success. Following these resignations, the Board consists of José Neves."
Coupang, often dubbed the "Amazon of South Korea," emerged as that savior, providing Farfetch with the necessary capital to continue operations and avoid insolvency. With a reputation for fast and efficient delivery through its signature Rocket Delivery service, Coupang has revolutionized how consumers shop online in South Korea.
The company's commitment to innovation and customer experience has led to profitability for three consecutive quarters and set the stage for an optimistic future with expected earnings to double in the coming years.
For Coupang it's a strategic move integrating Farfetch's assets, Coupang aims to redefine the luxury shopping experience for its customers and position itself as a leader in the $400 billion global personal luxury goods segment. Coupang's expertise in logistics, bolstered by significant investments in AI and custom robotics, complements Farfetch's luxury retail platform.
This synergy enhances the end-to-end fulfillment process, offering an even more elevated service to the world's most exclusive brands and discerning consumers.
The acquisition also signifies the end of Farfetch's potential deal with Swiss luxury group Richemont, which would have seen an exchange of stakes between Farfetch and Richemont's Yoox Net-A-Porter platform.
Instead, Farfetch will now operate as a private company under Coupang's umbrella, with founder José Neves continuing to play a role in the business.
