Barely a month after completing its acquisition of Farfetch, Coupang, the online luxury retailer’s new owner, is starting to outline its plans for the future of the British company.
Brief details were provided in a conference call with analysts by Coupang founder and Chief Executive Officer Bom Kim, who took the opportunity to present the South Korean company’s latest fourth-quarter results.
At the meeting, Kim gave the impression that while he sees Farfetch as a “rare opportunity,” the company will remain in the background for now while Coupang continues to pursue greater market share in its home country and Taiwan.
“We hope to be talking in a few years about how Coupang has transformed Farfetch into a company that has transformed the customer experience around luxury fashion while providing strategic value for Coupang,” said Kim. “Today it is still too early for this discussion. Even if the full potential is not realized, we are very confident that this will prove to be a wise financial decision. We are already working on a plan to make Farfetch a self-financing company, without additional investment beyond the announced capital commitment. And we see many ways to make this a worthwhile investment for shareholders.”
Farfetch acquisition continues to face obstacles
While Kim’s outlook remains positive, Coupang’s acquisition of Farfetch hasn’t been entirely smooth since it was made.
Before the acquisition was completed, a group of Farfetch shareholders banded together to challenge the takeover, calling on advisers to “urgently explore options” to protect their interests in the face of “value destruction.”
The group, which called the sale “distressed” and questioned the speed of Farfetch’s decline before bankruptcy, later filed a winding-up petition for Farfetch and its founder Jose Neves, who has since stepped down from the role of CEO, claiming that the company’s management had taken “unjustified value-destroying steps” to secure the takeover.
In addition, the sale also led to the exit of well-known partners. Kering and Neiman Marcus, among others, have terminated their contracts with Farfetch, meaning their brands can no longer be listed on the retailer’s website.