LONDON — South Korean e-commerce giant Coupang, which bought the troubled Farfetch last year at a knockdown price of $500 million, said Wednesday that it had decided to shut down Farfetch Platform Solutions, Farfetch’s white label business unit.
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Stephen Eggleston, chief commercial officer at the loss-making Farfetch, said the company will focus more on its core marketplace business going forward after assessing its strategic priorities, in an email sent to brand partners seen by WWD.
Eggleston added that existing white label service clients will be transitioned to new suppliers, while Farfetch will continue to deliver “the best luxury experience for our customers” and strengthen its partnerships with brands, boutiques and department stores around the world.
It’s understood Farfetch Platform Solutions, which launched in 2015 with the first client being Manolo Blahnik, never achieved the scale or momentum that was envisioned by founder José Neves.
It promised to provide brands with access to tools and services that facilitate and enhance their online selling experience, with features like seamless inventory integration, support for powering independent e-commerce websites and collaborative relationships with brands.
Over the years, Farfetch Platform Solutions was able to attract clients such as Harrods, Balenciaga, Saint Laurent, Paul Smith, Roberto Cavalli, Ami, Balmain, Emilio Pucci, Sergio Rossi, Marc Jacobs, Philipp Plein and Palace.
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However, brands began to take online operations in-house post-pandemic as they began to understand the importance of having direct control over data security, product scarcity, and discounts. Additionally, in the wake of the sale to Coupang, Bergdorf Goodman and Kering were among the first to drop Farftech as a strategic partner earlier this year.
The departure of Kelly Kowal, head of Farfetch Platform Solutions, at the beginning of 2024 following Coupang’s acquisition of Farfetch has also sparked speculations that this non-core service was on the chopping block, among other assets that could be sold to potential buyers such as Browns and New Guards Group to ease Coupang’s financial burden.
In the second quarter that ended June 30, Coupang registered a net loss of $105 million, a decrease of $222 million year-over-year. It was primarily caused by the inclusion of the operating losses incurred at Farfetch and $121 million relating to the estimated administrative fine from the Korea Fair Trade Commission over allegations of favoritism of Coupang’s private-label goods over those from third-party merchants.
For the first quarter ended March 31, Coupang said Farfetch added $288 million in revenues to its business but generated net losses of $93 million. Adjusted losses before interest, taxes, depreciation and amortization tallied $31 million.
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