Farfetch founder sacked after failed US float sparks takeover

Mr Neves will take on a consulting role with the luxury clothing retailer. Photo: Julian Simmonds

The founder of luxury fashion retailer Farfetch has been sacked weeks after she was rescued for $500m (£400m) by the Korean e-commerce giant.

Jose Neves, who founded the British company in 2007 and led it to a $6.2 billion U.S. listing in 2018, will step down as CEO effective immediately, employees were told in a memo on Thursday.

Key aides to Mr Neves are also leaving the company as part of a management purge that will precede staff layoffs. starting Friday.

In December, Coupang rescued Farfetch with a $500 million loan after rapid expansion left the company unable to pay its debts and facing the prospect of administration. The company's shares collapsed following its float, and investors were wiped out as part of the rescue deal.

Mr Neves will remain in an advisory role, but Farfetch will be run by Coupang's existing management for now and will not be directly subject to replacement.

Farfetch employees were warned of upcoming layoffs. Photo: BRENDAN MCDERMID/REUTERS

Farfetch had 6,728 employees at the end of 2022, including 1,179 in the UK. Staff were told the cuts would begin in Portugal on Friday, and in the UK and other countries on Monday.

The memo said: “After careful consideration, we have decided to streamline the business to enable us to operate from a position of financial strength.

“While going through this process is never easy, this was a necessary decision to secure the future of our business.”

The departing executives include Chief Financial Officer Tim Stone and Chief Operating Officer Luis Teixeira.

Mr Neves, who before its rescue owned 15% of Farfetch shares and more than 70% of its voting rights, sought growth through acquisitions and hiring quickly, but faced challenges after the pandemic online shopping boom came to an end. Farfetch lost money for four consecutive financial quarters before being rescued.

Farfetch agreed to buy a 48% stake in luxury retailer Yoox Net-a-Porter, but the deal was eventually called off as the company struggled financially Problems.

A spokesperson said: “After assessing key priorities and resources across the business, we have made the difficult but necessary decision to reduce global headcount and redundant positions.”

“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: delivering exceptional experiences to brands, boutiques and customers.»