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Farfetch founder ousted after failed US float triggered takeover

Jose Neves, founder and chief executive of Farfetch
Mr Neves will take on a consultancy role at the luxury fashion retailer - Julian Simmonds

The founder of the luxury fashion retailer Farfetch has been ousted weeks after its $500m (£400m) rescue by a Korean internet shopping giant.

José Neves, who founded the British company in 2007 and led it to a $6.2bn US listing in 2018, is stepping down as chief executive with immediate effect, staff were told in a memo on Thursday.

Mr Neves’ key lieutenants are also leaving the company as part of a management clear-out that will come ahead of staff redundancies starting on Friday.

Farfetch was rescued by Coupang with a $500m loan in December after rapid expansion left it unable to pay its debts and facing the prospect of administration. The company’s shares had collapsed since its flotation and investors were wiped out as part of the rescue deal.

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Mr Neves will stay on in a consultancy role but Farfetch will be run by Coupang’s existing management for now and he will not be directly replaced.

A banner to celebrate the IPO of online fashion house Farfetch
Farfetch staff have been warned of coming job cuts - BRENDAN MCDERMID/REUTERS

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

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

“While it’s never easy to go through this process, this was a necessary decision to secure the future of our business.”

Executives departing include chief financial officer Tim Stone and chief operating officer Luis Teixeira.

Mr Neves, who had a 15pc stake in Farfetch before its rescue and more than 70pc of its voting rights, pursued growth through acquisitions and rapid hiring, but struggled after the pandemic online shopping boom came to an end. Farfetch lost money for four consecutive financial quarters before its rescue.

Farfetch had agreed to buy a 48pc stake in luxury retailer Yoox Net-a-Porter but the deal was ultimately called off as the company fell into financial trouble.

A spokesman said: “As we assessed key priorities and resources across the business, we made the difficult but necessary decision to reduce global headcount and redundant roles.

“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: deliver exceptional experiences for brands, boutiques and customers.”