Farfetch will get an alternative to bankruptcy in the form of access to $500 million in capital, thanks to a deal for Coupang to acquire Farfetch’s business assets.

The $500 million will take the form of bridge loans made possible through a partnership with the investment firm Greenoaks Capital Partners, which is working on the deal with Coupang to acquire Farfetch and take the luxury fashion marketplace private.

Coupang ranks No. 12 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. Farfetch is No. 30.

What Coupang gains

“Farfetch is a landmark of the luxury landscape and has been a transformative force in demonstrating that online luxury is the future of luxury retail,” said Bom Kim, founder and CEO of Coupang, which is based out of Seattle and Seoul. “Farfetch will rededicate itself to providing the most elevated experience for the world’s most exclusive brands, while pursuing steady and thoughtful growth as a private company. We also see tremendous opportunities to redefine the customer experience for luxury clients everywhere.”

Coupang, which already operates the largest online marketplace in South Korea, will seek to benefit from Farfetch’s reach in the luxury goods market to bolster sales in the country. South Korean consumer spending on luxury goods is the highest in the world at $325 per capita a year, according to research published by Morgan Stanley in 2023.

End of Farfetch’s deal with Richemont

The acquisition means that Farfetch will abandon another proposed deal with the Swiss luxury goods group Richemont. That transaction, which will not be completed, would have seen Richemont take a minority stake in Farfetch, with Farfetch gaining a stake in Richemont’s Yoox Net-A-Porter platform in exchange for shares.

Even with the Yoox Net-A-Porter spinoff lined up, however, Farfetch still faced the prospect of financial insolvency with additional measures before Christmas, The Sunday Times reported. The capital provided as a result of the Coupang and Greenoaks partnership will serve as a lifeline to avoid that fate.

Farfetch’s path from public trading to going private

“Coupang’s proven track record and deep experience in revolutionizing commerce will enable us to deliver exceptional service for our brand and boutique partners, as well as for our millions of customers around the world,” said José Neves, founder, CEO and chairman at Farfetch. “We are thrilled to be partnering with such a respected Fortune 200 company that is committed to investing in innovations that transform all aspects of the customer experience with Farfetch.”

Farfetch, which is based out of London, went public in 2018, trading at an opening share price of $27. On Friday, the stock closed at $0.64, down more than 97% from its all-time high.

Coupang’s stock price was down more than 4% after news of the acquisition broke on Monday.

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