Bad news for Farfetch, as problems aren’t over. It’s worse. Kering and US retail group Neiman Marcus have stopped doing business with the e-tailer. Moreover, some creditors (some with over 400 million USD), is demanding the company is sold off to regain some of the losses. They also accuse founder Josè Neves “to have undertaken unjustified initiatives causing destruction of value” for the platform. In other terms, Neves devalued Farfetch to then sell it.
Bad news from Farfetch
In just 4 days three bad news arrived from Farfetch. At the end of January, South Korean company Coupang announced it completed the purchase of Farfetch by paying 500 million USD to guarantee the correct functioning of the business. Coupang didn’t mention any potential job losses or the sale of non-essential assets, among which is New Guards Group, which Style Capital wants to buy.
The first
The first one, in chronological order, has to do with the group of creditors that presented at in the Cayman Islands a lawsuit to combat the sale of Farfetch to Coupang. Why? To be reimbursed. This group is demanding 400 million USD in funds and wants the courthouse to nominate indipendent liquidators, citing large “holes in the company’s governance”. These same creditors are also demanding, reports The Telegraph, an investigation into José Neves’ behavior.
The second
The second news comes from the USA. Neiman Marcus decided to end its partnership with Farfetch. WWD reports that the website and app by Bergdorf Goodman will no longer be distributed by Farfetch Platform Solutions. Additionally, plans leading to the union of divisions from Neiman Marcus and Bergdorf Goodman with Farfetch have been abandoned.
The third
The third news is that Kering decided to remove its brands from Farfetch. Business of Fashion writes that Kering will gradually remove its brands during the second quarter of 2024. In the future, the brands owned by the group will only be available on the websites of official third-party retailers. Kering’s decision would remove over 100 million USD in sales (yearly).
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