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.
The Swiss luxury conglomerate reports quarterly results this week, as the failed deal to offload its struggling e-commerce unit to Farfetch looms large. That, plus what else to watch for in the coming days.
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.
The e-commerce giant is seeking a cash injection to avert a collapse that could send shockwaves across the fashion industry. So far nobody has come to the table and time is running out, but founder Jose Neves may yet have a move up his sleeve.
The luxury e-tailer could be the latest e-commerce firm to go private amid its worst year as a public company. But Farfetch’s much scrutinised lack of focus could persist outside the public market.