Farfetch, the British luxury fashion site, is currently in discussions with Apollo Global Management to secure emergency funding, according to reports. The talks come as Farfetch seeks to stabilise its finances amid challenging times.
Several parties are reportedly engaged in discussions with owners of the fashion site, Farfetch regarding new financing, with Apollo Global Management being one of them. However, sources caution that a deal is not guaranteed and that discussions are ongoing.
The specifics of the funding, including whether it will be provided as debt, equity, or a combination of both, remain unclear. Reports suggest that Farfetch may need to raise as much as $500 million to address its financial challenges.
This development follows recent reports that Farfetch’s founder, Jose Neves, was exploring the possibility of taking the company private due to its struggles as a public company. However, doubts have been cast on this possibility given the company’s financial situation.
Initially backed by Richemont, the luxury goods group behind Cartier, Farfetch went public in 2018 and was once valued at $23 billion. However, its market value has since declined significantly, standing at just $221 million as of Wednesday.
Richemont has stated that it will not invest additional funds into Farfetch, which recently delayed the announcement of its quarterly results, causing its shares to plummet.
Despite experiencing growth during the pandemic-fueled surge in online shopping, Farfetch has faced challenges and continues to operate at a loss. Founded in London in 2007, the company operates as a marketplace for luxury boutiques worldwide, connecting customers in over 190 countries.
As Farfetch navigates its financial difficulties, it has initiated the sale of subsidiaries, including luxury retailer Browns. Additionally, its plans to acquire a stake in Yoox Net-a-Porter, another online fashion player, appear unlikely to materialise.
While the identities of other parties engaged in financing discussions with Farfetch remain unclear, both Apollo and Farfetch declined to comment on the matter.
As the situation unfolds, stakeholders will closely monitor developments to see how Farfetch addresses its financial challenges and positions itself for the future in the competitive luxury fashion market.
