Farfetch (NYSE:FTCH) shares fell as much as 38% in early New York trading on Monday after the company announced Coupang (CPNG), will acquire its business and assets.
This strategic move positions Coupang as a leader in the global personal luxury goods segment, estimated at $400 billion, the two companies said in a press release.
Coupang stock fell 5.1% on the news.
The agreement provides Farfetch with access to $500 million in capital, enabling the continuation of providing exclusive brands and boutiques with cutting-edge technology.
“Farfetch is a landmark of the luxury landscape and has been a transformative force in demonstrating that online luxury is the future of luxury retail,” said Bom Kim, Founder & CEO of Coupang.
“Farfetch will rededicate itself to providing the most elevated experience for the world’s most exclusive brands, while pursuing steady and thoughtful growth as a private company. We also see tremendous opportunities to redefine the customer experience for luxury clients everywhere.”
Greenoaks, a global investment firm, played a significant role in the transaction and is Coupang's investment partner in this acquisition.
“Coupang’s proven track record and deep experience in revolutionizing commerce will enable us to deliver exceptional service for our brand and boutique partners, as well as for our millions of customers around the world,” said José Neves, Farfetch Founder, CEO and Chairman.