By Sara Fabek Zovko
The acquisition took fashion news by storm, but what does it actually mean for the retailers?
South Korea’s leading e-commerce retailer, Coupang, has just purchased global luxury fashion platform, Farfetch. The deal that took fashion news outlets by storm earlier this week has left Farfetch with $500 million in emergency funding, and is set to be finalised early next year.
The deal arrived just in time, saving Farfetch from bankruptcy, as the decreased demand and slowing luxury market have begun to make its mark on the platform. After several weeks of searching and palpable pressure, Coupang has come to the rescue and even acknowledged the significance Farfetch holds in the online luxury fashion space.
Farfetch has underlined that the emergency funding provided by its buyer will be used to seamlessly continue providing luxury brands and boutiques with the consumer access it has been providing thus far, promising to continue business as usual as the acquisition moves forward.
On the other side of this purchase, Coupang has been incorporated into everyday life in its home market of South Korea, as well as nearby countries such as China, Singapore and Taiwan, comparisons have been made to China’s Alibaba. It’s founder and CEO, Bom Kim, has, however, expressed ambitions to move into the luxury retailer space going forward.
Along with the operational changes typical of an acquisition like this, Farfetch is to be pulled off the New York stock exchange, and its shareholders will see their investments wiped out. Aside from that, business should continue as usual, making this purchase a choice that will clearly provide bright and successful futures for both retailers.
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