New York-listed South Korean e-commerce giant Coupang has rescued Farfetch Holdings from the brink of bankruptcy through an acquisition that grants the luxury platform access to US$500 million of capital to stay afloat.
“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,” said Bom Kim, founder and CEO of Coupang.
“This acquisition positions Coupang as a leader in the $400 billion global personal luxury goods segment,” Coupang said in a statement.
The deal is expected to be finalised next year. Operating food delivery, video streaming and payment services in Asia, Coupang made its IPO debut on the New York Stock Exchange in 2021.
Following the announcement, luxury group Richemont said it had scrapped the deal to sell a 47.5 per cent stake in Yoox-Net-a-Poter (YNAP) to Farfetch.
“It is reasonable to expect that the US$300 million convertible senior notes issued by Farfetch Limited to Richemont in November 2020 will not be repaid,” the company said.
Richemont said YNAP has not adopted Farfetch Platform Solutions and continues to operate on its technology. It will also re-evaluate options for YNAP to “best harness its strengths and potential under new stewardship”.
Last month, Richemont said it was reviewing its options around the deal, under which it would receive an initial 58.5 million Farfetch shares. A person familiar with the matter said Richemont had “definitely no intention” of putting money into Farfetch, but declined to comment if a delisting would void the deal.
Based in London, Farfetch went public on the New York Stock Exchange in 2018 before reaching its peak in 2021 with a value of more than 23 billion driven by the online shopping boom during the pandemic.