Coupang finalises takeover of troubled marketplace Farfetch

South Korean online giant Coupang has wrapped up its deal to acquire Farfetch, a well-known luxury goods online marketplace. This finalisation marks the end of an agreement that was first made public last December.

This deal's conclusion comes after last year's announcement when Coupang stepped in with a $500 million bridge loan to save Farfetch from bankruptcy. This move wiped out the ownership stakes of all Farfetch's equity holders, including its staff.

However, the acquisition has faced significant pushback, especially from a group of investors known as the 2027 Ad Hoc Group. This group, owning more than half of Farfetch's convertible notes, strongly opposes the deal. They are worried about Farfetch's value dropping under Coupang's control and have accused Farfetch of hiding its financial problems. This comes after Farfetch's earlier forecast of having $800 million in cash by the end of 2023, which sharply contrasted with its urgent search for financial help just four months later.

With Coupang now in charge, the destiny of Farfetch's various previous acquisitions is unclear. Currently, Farfetch is trying to sell Violet Grey, a beauty retailer it bought in 2022 for $50 million. Talks are also ongoing about selling its brand incubator, New Guards Group, known for managing Off-White, and the luxury UK retailer Browns.

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