After weeks of financial uncertainty and talks of looming liquidation, Farfetch has found its saving grace in South Korean e-commerce company Coupang.
Earlier today, Coupang announced its acquisition of the UK-based luxury marketplace, offering $500 million in emergency funding. According to Farfetch, the capital infusion will enable the company to “continue providing exclusive brands and boutiques with bespoke, cutting-edge technology and giving leading designers access to consumers around the globe.”
The news arrived at the final hour for Farfetch. Once valued at around $24 billion, the company now has a market capitalization of just $226.7 million. In Q2 2023, it fell short of projected revenue, dropping 1.3 percent year-on-year to $572 million in sales. With talks of potential insolvency before the end of the year escalating, a white knight was the only way out.
Starting today, Farfetch will be under the full control of Coupang. This means that Richemont’s pending agreements for a majority stake in Farfetch’s Yoox Net-A-Porter group and Alabbar, YNAP’s partner in the Middle East, have been terminated due to Coupang’s acquisition.
Widely recognized as the “Amazon of Asia,” Coupang made its debut on the 2023 Fortune 500 list in June. Founded in 2010, the company has become a convenient fixture for Korean locals, offering budget deals and discounts on anything from holidays to beauty treatments, similar to the American merchant marketplace Groupon. In 2021, Bloomberg reported that the e-tailer giant was on track to be the largest listing by a Korean company in a decade.
In 2021, Coupang doubled its share of the South Korean market from 7.4 percent in 2017 to 15.7 percent. Today, it holds approximately 35 percent of the market, according to data from Bank of America.