We know that the times are troubling for one of the most famous luxury fashion retailer in the world that is FarFetch and it has already applied for bankruptcy in the US and we have seen reports that the company is now looking for a buyer in order to sell the company and its assets. Now, there is good news for the luxury retailer as there is one e-commerce company that is interested in acquiring FarFetch and it is none other than Indonesian e-commerce giant Coupang which says that it plans to acquire the luxury retailer for an undisclosed amount but it did release a joint statement that the “deal that will provide the struggling online luxury fashion retailer with $500 million in capital to stay in operation”. It is also seen that the investors of both these firms were not enthusiastic about this announcement as “Trading in shares of Farfetch, which has a market capitalization of $226.7 million, were halted, while those of Coupang were down 4.5% on Monday”.
According to a report, FarFetch is “an e-commerce company that has helped luxury brands sell online, has been hit by a slowdown in the industry which has complicated its efforts to make a profit on technology investments and prompted credit rating downgrades in recent weeks”. It adds that “Farfetch operates an online luxury marketplace selling high-end fashion and jewelry that dozens of small brands and boutiques rely on as their main selling platform. It also provides back-end technology for e-commerce for department stores and brands like Harrods and Ferragamo”.
Interestingly, the report gives us details about this deal and reveals that “Coupang, which operates food delivery, video streaming and payment services in markets including South Korea, Taiwan, Singapore, China and India, struck the deal with an investor group that held over 80% of Farfetch’s outstanding $600 million term loans”. Coupang stated that “it would combine its logistics expertise with Farfetch’s experience selling high-end brands to expand in South Korea, a fast-growing luxury goods market”. It is also reported that “JPMorgan advised Farfetch on the deal.” “Richemont added it did not expect to be repaid a $300 million loan to Farfetch issued in November 2020”.