South Korean e-commerce giant to acquire Farfetch
Farfetch Holdings plc has been rescued.
The ailing global online marketplace for luxury fashions has agreed to be acquired by Coupang, which is sometimes called the Amazon of South Korea. The acquisition will allow Farfetch to avoid bankruptcy, giving the company access to $500 million in emergency capital. As part of the agreement, Farfetch, which once dominated luxury fashion, will be taken private.
In a statement, Farfetch said the capital infusion will allow it to “to continue providing exclusive brands and boutiques with bespoke, cutting-edge technology and giving leading designers access to consumers around the globe.”
The Farfetch Marketplace connects customers around the world with items from more than 50 countries and more than 1,400 of the world’s top brands, boutiques, and department stores. Farfetch’s additional businesses include Browns boutique in London and Stadium Goods, a New York-based premium sneaker and streetwear marketplace. The acquisition positions Coupang as a leader in the $400 billion global personal luxury goods segment.
“Coupang’s proven track record and deep experience in revolutionizing commerce will enable us to deliver exceptional service for our brand and boutique partners, as well as for our millions of customers around the world,” said José Neves, founder, CEO and chairman, Farfetch. “We are thrilled to be partnering with such a respected Fortune 200 company that is committed to investing in innovations that transform all aspects of the customer experience with Farfetch.”
Coupang is headquartered in the U.S., and has e-commerce operations in South Korea, Taiwan, Singapore and India. In addition, it offers grocery, payment and video streaming services.
The company said it is “uniquely positioned to unlock Farfetch’s tremendous value for the vast personal luxury goods segment in South Korea, which has the world’s highest per-capita spending on personal luxury goods, according to the release.”
“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,” said Bom Kim, founder and CEO of Coupang. “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. We also see tremendous opportunities to redefine the customer experience for luxury clients everywhere.”
Greenoaks, a leading global investment firm, brought financial expertise to the transaction and is Coupang’s investment partner in this acquisition.
Coupang offers a variety of services, including same-day and dawn delivery of merchandise, delivery of prepared foods through Coupang Eats, fintech through Coupang Pay, and video streaming through Coupang Play. It is headquartered in the United States, with operations and support services performed in markets including South Korea, Taiwan, Singapore, China and India.