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Kering and Neiman Marcus Abandon Farfetch After Coupang Acquisition

Farfetch Neiman Marcus Kering
CREDIT: NEIMAN MARCUS

The acquisition of struggling company, Farfetch, by South Korean retail giant Coupang continues causing aftershocks across the industry.

Weeks after the contentious tie-up was finalized on January 31st, 2024, luxury conglomerate Kering has pulled its portfolio of brands off the platform. Meanwhile former partners Neiman Marcus Group rescinded plans to overhaul Bergdorf Goodman’s e-commerce via Farfetch and sell its merchandise on the site.

The high-profile abandonments validate concerns held by dissenting Farfetch shareholders of irreparable damage from the Farfetch-Coupang deal. They also underscore brands’ wariness of affiliation with a marketplace whose future strategy and positioning under Coupang’s direction remains uncertain.

Tumultuous Coupang Takeover

Farfetch’s road to acquisition by Coupang was fraught from the start. After a proposed merger with Richemont’s Yoox Net-a-Porter unraveled last spring, Farfetch lacked a clear path to profitability and teetered on the verge of insolvency. A literal last minute $500 million capital infusion deal from Coupang in late 2023 temporarily stabilized operations.

However a contingent of shareholders adamantly opposed Coupang gaining outright ownership over Farfetch’s assets in exchange for funding. On January 31st, Coupang prevailed in officially taking Farfetch private, stripped from public markets despite aggressive efforts to block the sale.

Luxury Defections Signal Lingering Distrust

Kering brands including Gucci and YSL’s disappearance from Farfetch seemingly confirms shareholders’ misgivings about Coupang’s takeover. While no formal statement outlined motives, Kering executive Jean-Marc Duplaix bluntly deemed Farfetch no longer strategically relevant. The luxury behemoth likely harbors doubts about marketplace integrity and positioning under new ownership.

High-profile partner Neiman Marcus Group also withdrew integrated e-commerce plans to leverage Farfetch’s technology and retail network. NMG will instead direct $200 million earmarked for the collaboration into wholly owned channels. Farfetch maintains only a minor investment stake as brands hesitate committing resources pending clearer direction.

Damage control efforts promote anonymity for luxury sellers wary of Coupang association. However with pillars like Kering and NMG retreating, Farfetch must work urgently to restore trust for brands questioning its future standing as a luxury platform.

Forbes

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