Farfetch shares plunge despite talk of founder taking it private

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Shares in Farfetch fell by as much as 50 per cent on Wednesday, despite reports that its founder could take the luxury online retailer private following a collapse in its market value.

Farfetch had been due to report quarterly results on Wednesday but postponed the announcement, saying it would “not be providing any forecasts or guidance at this time, and any prior forecasts or guidance should no longer be relied upon”.

Richemont, the Swiss luxury group that has been one of the ecommerce group’s main backers, also said it had no plans to invest any more money in Farfetch. 

José Neves, who launched the online retailer in the central London district of Clerkenwell in 2008, is exploring the option of taking it private with advisers at JPMorgan and Evercore, according to people with knowledge of the situation.

Farfetch, JPMorgan and Evercore declined to comment.

The company’s market value peaked at $23bn in early 2021 as pandemic luxury shopping boomed, but has since shrunk to below $400mn. The shares have lost more than 95 per cent of their value since it went public in New York in 2018. They rose by 22 per cent in US trading on Tuesday after the Daily Telegraph first reported the potential plan to take it private.

Neves owns 15 per cent of Farfetch but controls 77 per cent of the voting rights thanks to a dual-class share structure. Other large investors besides Richemont include Alibaba, the Chinese ecommerce group, and Artemis, the family holding company of the billionaire Pinault family.

Richemont, which owns jewellers Cartier and Van Cleef & Arpels, agreed to sell a stake in its lossmaking Yoox Net-a-Porter online fashion and accessories platform to Farfetch in 2020, but the deal has yet to close due to regulatory delays. It is unclear what a delisting would mean for the transaction.

Richemont on Wednesday said that it was…