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Farfetch financial rollercoaster: the fall, what went wrong beyond 2021
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| 8.05 MB | Adobe PDF |
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Farfetch, once a pioneering force in the luxury e-commerce sector, saw its stock price soar to
$73 during the COVID-19 pandemic, achieving a $24 billion market capitalization. However,
external factors such as high inflation, rising interest rates, intense competition, geopolitical
events, and supply chain disruptions contributed to its downfall. Internally, Farfetch faced
persistent negative cash flows, high operating costs, and significant debt, resulting in severe
financial distress. A $500 million bridge loan from Coupang and subsequent acquisition, caused
substantial losses for shareholders and convertible note holders. This series of events raised
concerns about transparency and governance within the company.
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Financial distress Governance E-Commerce - luxury fashion industry Growth firms Distressed firm valuation