Condé Nast pulls stake in luxury fashion retailer following enormous overspend
Vogue publisher Condé Nast, which had a 6% stake in marketplace Farfetch worth £234 million, has dropped it following a run of excessive spending by the platform.
In 2017, the relationship was established, with Vogue holding 6% of the company and directing readers to the website, which retails luxury garments from around the world in return. However, Farfetch founder Jose Neves has spent excessively, citing the need for ‘customer engagement’ and new technologies in driving profits.
Sales, in response, have risen by 56% to £475 million, at the same time as losses adding up to £122.7 million. In Q1 2019, Farfetch registered a loss of $109.2 million - up from a $50.7 million loss over the same period last year.
It has led to Condé Nast simply dumping its stake to minimise losses, and severing ties.
In March, Condé Nast's chairman, Jonathan Newhouse, made the decision to step down from the board of Farfetch, which perhaps served as foreshadowing of this episode.