Luxury e-tailer Farfetch has announced the closure of its e-commerce software service, Farfetch Platform Solutions (FPS), as part of a strategic shift to focus on its core marketplace. FPS, which provided online shopping tools for retailers like Harrods, will be discontinued due to Farfetch’s ongoing operating losses, which have impacted its parent company Coupang’s profits.
In an email to brand partners, Farfetch’s Chief Commercial Officer, Stephen Eggleston, emphasised that the company’s priority moving forward will be its marketplace. He noted that while FPS had been a significant part of Farfetch’s offerings since its launch in 2015, the focus will shift entirely to the core marketplace, which generated over US $ 3 billion in gross merchandise volume in 2022.
The decision to shutter FPS follows a period of declining business, with several brands, including Emilio Pucci, Proenza Schouler, and Phillip Lim, leaving the platform last year. Additionally, the Neiman Marcus Group discontinued plans to use FPS for Bergdorf Goodman’s online operations.
Farfetch’s operating losses have weighed on Coupang, the South Korean e-commerce giant that acquired Farfetch in December. Coupang reported a net loss of US $ 105 million for the second quarter of this year, marking its first loss in two years.
It remains unclear whether FPS was profitable for Farfetch. However, investors and analysts have previously criticised the company for prioritising FPS and other business units, such as its brand management platform New Guards Group, over enhancing its core marketplace.
Farfetch has yet to announce plans for New Guards Group, but Coupang expects the company to improve its profitability by the end of the year. In a statement, Farfetch reiterated its commitment to delivering exceptional luxury shopping experiences through its marketplace.
