Recently, José Neves, the chief executive of Farfetch, announced his departure from the company amidst significant changes at the firm. This move comes after the South Korean company, Coupang, acquired Farfetch for a whopping $500 million. Neves is not the only one making an exit, as Chief Fashion and Merchandising Officer Elizabeth Von Der Goltz and the Head of Farfetch Platform Solutions (FPS) are also preparing to leave.
According to reports, Neves will continue to be associated with Farfetch in a consulting role, but the company has no plans to directly replace him. Instead, the business will be overseen by Coupang founder Bom Kim and the existing executive team at Farfetch. This news was revealed in an internal memo seen by WWD, a renowned fashion industry publication.
A spokesperson for Farfetch confirmed the departure of these key executives and explained the company's decision to streamline operations by reducing global headcount and eliminating redundant roles. Despite these organizational changes, the spokesperson assured that this move will strengthen the future of the business and enable Farfetch to focus on their core strength – delivering exceptional experiences for brands, boutiques, and customers.
WWD also reports that additional job cuts are expected in the coming days as Coupang seeks to improve the financial strength of Farfetch through a well-structured organization. The extent of these job cuts has not been disclosed, but affected employees will be informed through conversations starting in Portugal and then extending to the UK and other regions.
Coupang's acquisition of Farfetch, finalized in January, has faced criticism from partners and shareholders alike. Farfetch had been reporting strong liquidity and enterprise value of $3 billion in August, only to later engage in what disgruntled shareholders consider a 'distressed sale.' These investors, who hold more than 50 percent of Farfetch's 3.75 percent convertible senior notes, are challenging the takeover and have even petitioned for Farfetch's winding up in the Cayman Islands. They are also demanding an investigation into Neves' involvement in the sale, accusing him of making value-destructive decisions.
The negative response to the acquisition is not limited to shareholders. Former loyal partners of Farfetch, including Kering, Richemont, and Neiman Marcus, have terminated or suspended their contracts with the retailer and its tech offerings.
As Farfetch undergoes this significant upheaval, it remains to be seen how the company will adapt to the new leadership and organizational structure. While these changes may be challenging, Farfetch hopes that they will ultimately position the company for renewed success, allowing it to continue providing exceptional experiences for brands, boutiques, and customers in the ever-evolving fashion industry.
