Johann Rupert's luxury group Richemont will no longer be selling a stake in its online business Yoox-Net-A-Porter (YNAP) to online retailer Farfetch it said on Monday afternoon.
This is after South Korean e-commerce giant Coupang said it was planning to buy luxury online retailer Farfetch.
London-based Farfetch lost more than 90% of its value in the past two years as luxury goods faced weaker demand in Europe and the US.
The purchase by Coupang will inject $500m in capital into the ailing online retailer.
In August 2022 Richemont made a deal to sell a 47.5% stake in YNAP in exchange for more than 50-million Farfetch shares. It was trying to create a neutral industry-wide online platform for luxury brands.
Richemont has had to write down more than €1.8bn in its online retail investment YNAP since 2010 and had hoped the Farfetch technology would help it to better sell its luxury brands that include Van Cleef and Arpels, Cartier and Vacheron Constantin online.
But Farfetch has run into trouble since the deal was first announced.
According to website Seeking Alpha, Farfetch share price plunged 67% since November 28 after the company said it won't release its third quarter results and Richemont said it had no plans to invest in or help out the ailing company after a report that Farfetch’s founder was hoping to delist it and take it private.
On Monday, Farfetch, which has a market capitalisation of $226.7m, saw the fall in its share price halted, while Coupang’s share price was down 2.7% in early trade.
Coupang made the deal with an investor group that held more than 80% of the outstanding $600m in term loans.
Last month, the Telegraph reported that Farfetch founder and CEO José Neves was in talks with top shareholders, including Cartier owner Richemont, to take the company private.
With Reuters
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