US consumer spending across online luxury sellers like Farfetch, Matches and Net-a-Porter suffered sustained declines throughout 2023. The question is whether the downturn is simply temporary or the luxury e-commerce model itself is broken.
While cash-strapped e-tailers Farfetch and Matches narrowly avoided collapse this week, both inking sales to new owners, online luxury’s way forward remains unclear.
The sale sees owner Apax Partners take a heavy loss on the British e-tailer, recently rebranded simply Matches, amid a broader meltdown in the luxury e-commerce space.
Reports of financial strain at Farfetch amid a stalled deal with YNAP has driven confidence in multi-brand e-commerce to all-time lows. With value propositions eroding and investment drying up, a way forward remains unclear.
This week, Ssense said it laid off 138 workers, and MatchesFashion received a $73 million cash injection from its shareholder. From more niche players to giants like Farfetch, the pressure remains high for luxury e-tailers.