Farfetch’s downward spiral ends with acquisition by South Korea’s Coupang

Farfetch has had a difficult year. The company went from getting approval on a massive deal to buy Yoox Net-a-Porter from Richemont to canceling its last earnings report at the last minute, struggling with a massive debt load and potentially going private.

Now, the company has been sold. Announced Monday morning, Farfetch has been purchased by the South Korean e-commerce company Coupang. The announcement came as rumors swirled that Farfetch was skirting close to bankruptcy. The combination of spending on major initiatives like the purchase of YNAP just as spending on luxury began to decline across the U.S. put it in a risky situation. In November, the company called off its third-quarter earnings release shortly before it was scheduled, saying it would issue further guidance soon.

Farfetch’s shares have lost 97% of their value over the last five years. By the beginning of December, it was clear Farfetch was in need of emergency funding. That’s now come in the form of $500 million from Coupang to buy a majority stake in the company and take it private. Farfetch has several major backers including LVMH, Richemont and Alibaba, but none of them came to its rescue. Richemont explicitly stated in November that it would not invest any further cash into Farfetch.

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