Coupang, the South Korean e-commerce giant, acquired Farfetch in December 2023 and has taken significant steps to cut costs at the online luxury firm. Over the past year, Farfetch has saved millions by switching logistics partners, closing unprofitable business units, and selling off labels from its brand incubator. In the final quarter of 2024, Farfetch’s adjusted earnings before interest, taxes, depreciation and amortisation reached $30 million, up from a $34 million loss during the same period in 2022.
However, these profits have come at a price. Farfetch generated $471 million in net revenue in the final quarter of 2024, a 25 percent decline from the same period in 2022. Farfetch achieved revenues of $1.7 billion in 2024, with losses narrowing to $34 million.
This marked a significant improvement from 2022, when revenues were $2.3 billion, but losses were $98.7 million. Stephen Eggleston, chief commercial officer at Farfetch, said, “Our customers continue to find on Farfetch the pieces that speak to their diversity of styles, preferences, and aesthetics.
Coupang trims Farfetch divisions profitably
We work directly with a global network of established boutiques and top brands, which enables us to offer an incredible and authentic selection.”
Coupang has also spent the past year cleaning up the Farfetch business, shuttering various divisions, including the platform solutions business. New Guards Group, a division of Farfetch, sought Chapter 11-style bankruptcy protection in Italy last year. Despite these optimistic financial adjustments, many within Farfetch feel that the aggressive cost-cutting measures are stripping away the e-tailer’s core strengths.
Personalized VIP services and extravagant events, once a staple, have seen drastic budget reductions—from $2 million to $80,000 annually. Farfetch’s shift in strategy starkly contrasts with that of its competitors, such as Mytheresa, which continue to focus on curated selections for ultra-wealthy clients. Sales data reflect some of these challenges; Farfetch’s revenue in the third quarter fell by 26 percent compared to the previous year, and dropped another 5 percent during the quarter ending in December.
Coupang, confident in its strategy, has also reshaped Farfetch’s leadership, shedding over half of its staff and integrating a more hierarchical approach. Farfetch’s founder José Neves and several top executives were among the first to depart, signaling a decisive shift from the company’s collaborative roots to a leaner operational model.
