The controversial takeover of Farfetch by the South Korean e-commerce company Coupang now also has consequences for CEO José Neves.
Neves, who founded the luxury online retailer in 2009 and has served as managing director since then, will step down from his position as CEO. This emerges from an internal memo that has been obtained by several media outlets, including Women’s Wear (WWD) Daily. According to the industry magazine, Neves Farfetch will remain in an advisory role. His role will not be filled immediately; rather, the Farfetch management team will temporarily manage the business together with Coupang founder Bom Kim. Coupang acquired Farfetch a little less than a month ago for $500 million.
The changes don’t stop with Neves’ resignation, which is part of a series of layoffs at Farfetch. In addition to Neves, Elizabeth von Der Goltz, Chief Fashion and Merchandising Officer, is also said to be preparing to resign. In addition, a wave of layoffs is imminent.
“As we assessed key priorities and resources across the company, we made the difficult but necessary decision to reduce global headcount and eliminate roles,” a Farfetch spokesperson told WWD. “This decision secures the future of the company and as a result Farfetch can now operate from a position of strength and focus on what we do best: delivering exceptional experiences for brands, boutiques and customers.”
More job cuts expected in the next few days
The company has not yet revealed how many employees will be affected by the reduction in headcount, but initial discussions with those affected are scheduled to begin on Friday in Portugal before Farfetch’s other offices follow on Monday.
It is also currently unclear how the platform’s shareholders and partners will react to the latest development in the Farfetch saga. Angry shareholders had already strongly criticized the sale to Coupang last week and described it as an “emergency sale”. Before the takeover, Farfetch reported high liquidity and an enterprise value of three billion US dollars in August.
The investors, who hold more than 50 percent of Farfetch’s 3.75 percent convertible bonds, have challenged the takeover and called for an investigation into Neves’ actions in connection with the sale. They accused the outgoing CEO of, among other things, taking “unjustified, value-destroying steps.”
The company’s partners, including some luxury goods companies, also drew consequences. Both Gucci parent Kering and Richemont have distanced themselves from the company and will no longer offer their goods on the platform in the future. In addition, Neiman Marcus Group has also terminated its contracts with the retailer and its technology offering.