Farfetch Acquired by Korean eCommerce Giant Coupang

Struggling luxury retailer Farfetch has been purchased by Coupang, the South Korean eCommerce giant.

The deal gives Coupang greater access to the personal luxury goods space, while offering Farfetch $500 million to remain in operation, the companies announced Monday (Dec. 18).

“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,” Coupang founder and CEO Bom Kim said in a news release.

“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.”

The announcement follows reports from November that Farfetch founder José Neves was planning to take the company private.

With its new deal, the company gains access to, as the news release puts it, “the vast personal luxury goods segment in South Korea, which has the world’s highest per-capita spending on personal luxury goods.”

Farfetch’s deal with Coupang also marks the end of its plan to purchase the Yoox Net-A-Porter online fashion and accessories business from Cartier owner Richemont.

In its own statement Monday, Richemont said it would consider other options for its eCommerce services and noted that it did not expect the $300 million loan it had given Farfetch in November of 2000 would be repaid.

Last month, Farfetch announced that it would not disclose its financial results for the third quarter of 2023, a move that, as PYMNTS wrote, came toward the end of a “year filled with surprising developments” for the retailer.

In May, Farfetch recorded a turnaround following two consecutive quarters of falling sales. The retailer exceeded analysts’ expectations by reporting 8% year-over-year revenue growth, which it chalked up to an improved inventory management strategy, strategic partnerships and strong in-store sales.

And in August, the company confirmed the discontinuation of beauty product sales, just a year after its entrance into that market with the purchase of upscale beauty retailer Violet Grey.

As noted here, the decision “underscored the challenge confronting retailers in the industry: How to establish a foothold amid stiff competition from industry giants like Sephora and Ulta.”