Luxury Group Richemont Ends Planned Transaction with Farfetch

Luxury group Richemont has announced that it will not proceed with a planned transaction involving Farfetch and its Yoox Net-A-Porter platform. Additionally, Richemont expects to lose out on convertible senior notes that were previously issued by Farfetch.

This decision comes in the wake of the news that Coupang, a South Korean e-commerce company, is acquiring the business and assets of Farfetch.

Last year, Richemont and Farfetch reached an agreement in which Richemont agreed to divest nearly half of its e-commerce business YNAP in exchange for a minority stake in Farfetch and access to its platforms.

Richemont stated on Monday that it does not anticipate the repayment of the $300 million convertible senior notes issued by Farfetch in November 2020. This represents a carrying value of €218 million ($237.5 million) as of November 30, 2023, according to the company’s accounts.

Both Richemont and YNAP will continue to operate on their respective platforms, and Richemont will now re-evaluate its options for the sale of its e-commerce business.

Last November, Richemont had signaled the possibility of reviewing its deal with Farfetch amidst speculation that Farfetch might go private.

Coupang’s announcement on Monday to acquire Farfetch’s business and assets comes at a time when the luxury e-commerce company has faced financial challenges since its stock market debut in 2018. The value of Farfetch’s shares has significantly declined, starting at $27 per share five years ago and closing at $0.64 per share on Friday.

For Richemont, the profitability of YNAP has posed challenges, impacting the wider group’s performance. However, analysts and investors welcomed the agreement reached in August of last year.

By Andrea Figueras