Neiman Marcus Group is ending its commercial partnership with luxury e-commerce platform Farfetch, and its Bergdorf Goodman banner will no longer be replatforming onto Farfetch Platform Solutions, Neiman Marcus confirmed by email. Neither Coupang nor Farfetch immediately returned requests for comment.
The tie-up with Bergdorf was announced in 2022, the first move in a global strategic partnership between Neiman Marcus Group and Farfetch unveiled at the same time. The partnership entailed Farfetch making a minority common equity investment of up to $200 million into the legacy department store company, and on Wednesday Neiman said that Farfetch continues to be a minority investor.
Last month, South Korean e-commerce company Coupang completed its acquisition of Farfetch for $500 million.
The bad news for Farfetch continues even after its takeover by Coupang.
The e-commerce company was founded to take advantage of luxury retail’s slow entry into online sales. Since then, Farfetch forged several tie-ups, through partnerships like the one with Neiman Marcus and outright acquisitions of companies like Italian luxury conglomerate New Guards Group and sneaker resale marketplace Stadium Goods. The company attracted funds, nabbing more than $1 billion in 2020 from Alibaba and Richemont.
But last year Farfetch’s struggles intensified, culminating in the announcement of Coupang’s offer. Its deal to acquire a stake in the Yoox Net-a-Porter platform from Richemont — which in October had been cleared by European antitrust regulators — was terminated as Coupang took over.
The deals that Farfetch made or tried to make were “extremely complicated, both in terms of financial details and operational details,” Wedbush analysts Tom Nikic and Matt Quigley said in December.
“Essentially, they took what should have been an extremely simple business model and bogged it down with unnecessary complexity,” they said. Wedbush dropped coverage in January once Farfetch was taken over by Coupang, noting that “the transaction effectively wipes out holders of both the company's common shares and their convertible debt.”
In its statement, Neiman Marcus Group suggested that Bergdorf’s transition away from Farfetch would not be so complicated, and expressed gratitude for its ongoing, if more limited, involvement with Farfetch.
“[Neiman Marcus Group] is well positioned with exceptional technology, talent, and resources to further invest in and expand our digital and e-commerce capabilities,” the company said. “Our focus remains on continuing to deliver a differentiated luxury experience across all facets of our integrated retail model, and to position our business for sustainable, profitable growth. We appreciate FARFETCH, which continues to be a minority investor in NMG.”