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Farfetch CEO José Neves steps down: Why it matters

Neves was once at the forefront of the online luxury retail revolution. His departure signals the end of an era for e-commerce.

Published February 15, 2024

BY MALIHA SHOAIB

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What happened?

José Neves, who founded Farfetch in 2008, is stepping down as CEO following the company’s acquisition by South Korea’s Coupang in December. His departure is accompanied by several key executives, including Elizabeth von der Goltz, chief fashion and merchandising officer of Farfetch and CEO at Browns, and Kelly Kowal, head of Farfetch Platform Solutions (FPS).

 

“As we assessed key priorities and resources across the business, we made the difficult but necessary decision to reduce global headcount and redundant roles,” said a Farfetch spokesperson in a statement announcing Neves's exit (which did not address Kowal's and von der Goltz's departures). “This decision secures the future of the business and as a result, Farfetch can now operate from a position of strength and focus on what we do best: deliver exceptional experiences for brands, boutiques and customers.”

 

Neves will remain in a consultancy role, according to Farfetch, but no successor has yet been named — Coupang management will now oversee the Farfetch business in the interim.

 

Coupang, known as the “Amazon of Asia”, provided Farfetch with a $500 million lifeline after it emerged that the company was in need of a buyer. Shares dropped 38 per cent in pre-market trading following the announcement, hitting an all-time low. Farfetch’s deal to acquire a 47.5 per cent stake in Yoox Net-a-Porter from Richemont was scrapped.

 

The Coupang acquisition took Farfetch, which listed on the New York Stock Exchange in 2018, private, effectively wiping out the investments of its shareholders (including Neves himself). Last month, a group of Farfetch investors (who collectively hold 50 per cent of Farfetch’s convertible senior notes due in 2027, worth over $1 trillion) said they were coming together to challenge the Coupang acquisition and enlisted legal and financial advisors to “urgently” explore alternative options to the takeover. The group is now taking Farfetch to court in the Cayman Islands, asking for $400 million in return for their lost investments.

 

Why does it matter?

 

Neves’s departure signals the end of an era for e-commerce. When he founded Farfetch, he promised a new way for luxury customers to shop global brands as well as boutiques, bringing thousands of small retailers online in one place, and also led a number of acquisitions that built out the Farfetch umbrella — including Browns, Stadium Goods and beauty company Violet Grey. The latter was shuttered last year.

 

Farfetch’s white label e-commerce software FPS was pegged as the innovation that luxury needed to drive it into the future — with brands like Thom Browne and Ferragamo using it — but Farfetch (and its competitors) have also been struggling in the landscape as brands have developed their own selling platforms.

“The idea is to streamline the business and to take a step away from some of the management team that led the group into stormy seas,” says Neil Saunders, managing director at Globaldata.

 

He adds: “The departure of Neves is a real break with the past as he founded the company and has guided it through various stages of expansion. He will still act as a consultant, but his role and influence will be much diminished. More broadly, Coupang taking direct control is a good thing as it shows they are committed to the future of Farfetch.”

 

The luxury retail landscape has seen much disruption over the last year: Matchesfashion was acquired by Frasers Group in 2023, Macy’s reportedly received a buyout offer, while Saks is rumoured to be in talks to acquire Neiman Marcus. “Digital multi-brand platforms will need to rethink their strategy alongside luxury partners and how to keep consumers engaged. I believe the luxury market has started to evolve in the last two years and will continue to modernise in terms of retail strategy,” says Jessica Ramirez, senior research analyst at Jane Hali & Associates.

 

Since the acquisition was announced, there’s been a wave of industry fallout and questions over the future of Farfetch, despite understanding that Neves would be staying on under the new ownership. Earlier this month, reports emerged about Kering terminating its contract with Farfetch and effectively pulling its brands from the marketplace. Neiman Marcus Group also axed its plans to use FPS.

 

There’s still the question of what will happen to Farfetch’s New Guards Group and London retailer Browns, which Farfetch is reportedly looking to sell.

 

The future of Farfetch is uncertain, says Ramirez. “Its new owners need to prioritise one of Farfetch’s business aspects and divest from others.”

Neves’s departure is “no surprise”, says Bryce Quillin, founder of brand strategy agency It’s A Working Title. “His departure will raise questions about the continuity of Farfetch’s work in luxury, especially given the departure of some major brands from the platform and the absence of luxury expertise at Coupang.”

 

Clarification: Clarifies that Coupang will oversee Farfetch in the interim.

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