South Korea's Coupang acquires Farfetch; offers $500 mn capital

19 Dec '23

3 min read

Pic: Timon - stock.adobe.com

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South Korean e-commerce giant Coupang has acquired luxury fashion retailer Farfetch, providing it with $500 million in crucial financing to boost liquidity.
Concurrently, Farfetch has cancelled its plan to buy a 47.5 per cent stake in Yoox-Net-A-Porter and saw the resignation of all independent board members, leaving José Neves as the sole board member.

Luxury fashion e-commerce firm Farfetch has been acquired by South Korean e-commerce powerhouse, Coupang, in a transaction that will offer the e-retailer with $500 million in urgent financing. This move is part of an effort to bolster liquidity and ensure continuous operation amidst challenging financial conditions.

Farfetch Holdings plc (FF PLC), a key subsidiary of Farfetch Limited, under the legal framework of England and Wales, has entered into a first lien delayed draw term loan facility agreement. This agreement involves direct and indirect subsidiaries of FF PLC acting as borrowers or guarantors. The lenders include Athena Topco LP, linked to Coupang, Inc, and entities associated with Greenoaks Capital Partners LLC.

In addition to the bridge loan facility, FF PLC has also entered into a support agreement with various parties including Farfetch Limited, Athena Topco, and an ad hoc group of lenders. These lenders currently hold over 80 per cent of the outstanding term loans under FF PLC’s existing credit agreement, which dates back to October 2022 and has undergone amendments in 2023, Farfetch said in a statement.

Additionally, Farfetch Limited, FF PLC, Richemont, and Symphony Global mutually agreed to terminate the proposed acquisition of a 47.5 per cent stake in Yoox-Net-A-Porter (YNAP). This termination also affects the intended adoption of Farfetch Platform Solutions by YNAP and the Richemont Maisons, as well as the planned launch of Richemont Maison e-concessions on the Farfetch Marketplace.

“Following the transaction announced by Farfetch, it is reasonable to expect that the $300 million convertible senior notes issued by Farfetch Limited to Richemont in November 2020 will not be repaid. The carrying value of these notes in Richemont’s accounts amounted to €218 million as at 30 November 2023,” Richemont said in a statement.

In a parallel development, Farfetch Limited announced the immediate resignation of its independent board members - Dana Evan, David Rosenblatt, Diane Irvine, Gillian Tans, Stephanie Horton, and Victor Luís. Their departure, not attributed to any disagreement with the company’s operations or policies, leaves José Neves as the sole board member.

“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. 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,” Bom Kim, founder & CEO of Coupang, said in a press release.

“Coupang’s proven track record and deep experience in revolutionising 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, Farfetch founder, CEO and chairman. “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.”

Fibre2Fashion News Desk (KD)

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