[Update from 2/15/2024] Farfetch Founder and CEO Jose Neves is stepping down and further layoffs are imminent, according to an internal memo viewed by The Business of Fashion. Neves’ departure comes just weeks after the sale of Farfetch to Coupang, and he isn’t the only top-level executive now on the outside: BOF is reporting that the company’s CFO, COO, Chief Product Officer and Chief Platform Officer also are exiting. Coupang’s CEO Bom Kim and a team of remaining Farfetch executives will now helm the company as the acquisition takes effect.
Original story from 2/9/2024 begins –
Gucci and Yves Saint Laurent parent company Kering is pulling its brands off the Farfetch luxury marketplace, and Neiman Marcus Group is pulling out of a 2022 deal with the company that would have seen Farfetch manage the website and app of Bergdorf Goodman while also selling the department store chain’s wares on the Farfetch marketplace, multiple sources report. The moves by Neiman and Kering follow the contentious sale of Farfetch to South Korean ecommerce company Coupang, which was completed on Jan. 31, 2024.
After months of teetering on the brink of collapse, Farfetch found a solution in the form of Coupang in late 2023, when the company agreed to acquire the luxury marketplace’s business and assets in exchange for access to $500 million in capital that will allow Farfetch to continue operations. The last-minute acquisition by Coupang put an end to a deal with luxury giant Richemont that had been in the works for over a year and would have seen the spinoff of Yoox Net-A-Porter to form a joint venture with Farfetch. As a result of the sale, Farfetch is now a private company, after having been traded on the NYSE since its IPO in September 2018.
A group of Farfetch shareholders, calling themselves the 2027 Ad Hoc Group, were vehemently opposed to the Coupang deal and put forth a last-ditch effort to scuttle the sale in late January, but their efforts were in vain. Their concerns, however, appear to have been well-founded, as evidenced by the flight of Kering and Neiman Marcus within weeks of the acquisition.
Kering hasn’t made a formal announcement of its decision, but Jean-Marc Duplaix, the luxury giant’s Deputy CEO in charge of operations and finance, announced the news during the company’s recent earnings call, and Duplaix said in comments to WWD that Farfetch “is not a strategic partner for us.” However, Kering brands likely will continue to be available on Farfetch through third-party retailers, which make up the majority of Farfetch’s supply. Business of Fashion reports that Farfetch is considering providing “complete anonymity” to third-party retailers that sell on its marketplace in exchange for the sourcing of certain luxury brands as a workaround to decisions like Kering’s.
In late 2022, Neiman Marcus Group (NMG) entered a long-term agreement with Farfetch that saw the marketplace invest $200 million in the department store chain. As part of the deal, NMG planned to update the Bergdorf Goodman ecommerce experience using Farfetch’s software, Farfetch Platform Solutions, and bring both Neiman and Bergdorf onto the Farfetch marketplace. Now NMG has announced that none of that will be happening. However, Farfetch will remain a minority investor in NMG while the department store group invests its own capital into building its ecommerce business, reports Business of Fashion.
“We continue to partner closely with thousands of brands and boutiques around the world to provide an elevated online luxury experience for millions of customers,” said a Farfetch spokesperson in an emailed statement to BOF.