Luxury conglomerate Kering, which boasts globally recognized brands such as Gucci and Saint Laurent, has reportedly ended its direct relationship with online luxury retailer Farfetch. While Kering’s products may still be available on Farfetch through third-party sellers, the decision to sever direct ties is significant. This news comes on the heels of Neiman Marcus Group’s decision not to transition its Bergdorf Goodman webstore and app to Farfetch’s platform. Furthermore, Neiman Marcus will not be joining Farfetch’s marketplace despite a previous collaboration in 2022.
Although Kering has not publicly announced this move, the information was disclosed by the company’s finance chief, Jean-Marc Duplaix, during the release of its financial results report. Duplaix also noted that e-commerce sales have declined as a percentage of Kering’s overall sales. This downturn is expected due to the global increase in the cost of living, which likely led to reduced spending among luxury consumers. It is believed that Kering’s direct exposure to Farfetch is limited, minimizing the potential impact on the group.
Nevertheless, this setback adds to the challenges faced by Farfetch following the news of Neiman Marcus cutting ties. Moreover, Farfetch has faced significant difficulties over the past year, including the cancellation of a partnership with Richemont, which has contributed to a marked decline in its fortunes. The company had previously expanded beyond its core business as a luxury goods marketplace. The recent acquisition of Farfetch by South Korea’s Coupang has prompted the CEO to express intentions to refocus the company on its original operating model.
In conclusion, Kering’s decision to sever direct links with Farfetch deals a blow to the online luxury retailer. This announcement comes in the wake of Neiman Marcus Group’s decision to forego transitioning to Farfetch’s platform. Farfetch has encountered numerous challenges, including a near-collapse and the cancellation of significant partnerships. However, with its new owner, Coupang, aiming to recalibrate the company’s focus, the luxury e-commerce landscape continues to evolve. These recent developments underscore the ongoing challenges faced by online retailers in the luxury sector.