Rumors have been circulating that luxury fashion retailer Farfetch might be taken private by its founder, José Neves. These speculations have caused a surge in the company’s shares, which have been facing difficulties in recent years. According to the UK’s Telegraph newspaper, Neves is currently in discussions with bankers and major shareholders, including Cartier-owner Richemont, regarding a potential deal. Initial support for the plan has been shown by Richemont and Alibaba. Farfetch has not made any official announcement regarding going private, but the cancellation of its Q3 financial results and conference call has further fueled the speculations. Richemont, however, has clarified that it has no financial obligations towards Farfetch and is closely monitoring the situation.
The journey of Farfetch as a publicly listed company has been challenging. Although its shares initially performed well after its IPO on the NYSE in 2018, they have been on a steady decline since then. This decline can be attributed to ongoing losses and concerns about the company’s brand acquisitions. Farfetch’s venture into the beauty industry, in particular, has proven to be problematic. Despite these challenges, Farfetch continues to be a significant player in the luxury fashion retail sector, boasting ownership of several top brands. Given Neves’ controlling stake in the company and its current struggles, it is understandable that he may be considering the option of taking it private.
The uncertainty surrounding whether or not Farfetch will indeed proceed with going private remains, as no official announcement has been made. Nevertheless, such a move would provide Neves with the opportunity to revitalize the company’s fortunes away from the demands and pressures of the stock market. Only time will reveal if this potential scenario materializes.
Useful links:
1. Farfetch’s Biggest Problems Were the Ones Market Didn’t Expect – Vogue Business
2. What Goes on Inside Farfetch’s Start-Up Incubator? Store of the Future Dreamers – Business of Fashion
