Farfetch, the British luxury fashion site, is in talks to secure emergency funding from Apollo Global Management as it seeks to shore up its finances.
Sky News has learnt that Farfetch, which is listed on the New York Stock Exchange, is in discussions with several parties about securing new financing.
City sources said on Wednesday that Apollo was only one of a number of firms in dialogue with the company, and cautioned that a deal was far from certain to be reached.
It was unclear whether the new capital would be provided as debt or equity, or a combination of the two.
The quantum was also unclear, although The Sunday Times reported at the weekend that the company needed to raise as much as $500m.
The race to secure new capital comes a fortnight after it was reported that Jose Neves, Farfetch’s founder, was in talks to take the company private after a disastrous run as a public company.
People close to the situation cast doubt on that possibility given the state of Farfetch’s finances.
Backed by Richemont, the luxury goods group which owns Cartier, Farfetch floated in 2018 and was at one stage valued at $23bn.
On Wednesday, it had a market value of just $221m.
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Richemont has said it will not invest additional money into Farfetch, which last month delayed the announcement of its quarterly results.
Instead, Farfetch intends to “provide a market update in due course” – a statement which sent its shares plunging.
“The company will not be providing any forecasts or guidance at this time, and any prior forecasts or guidance should no longer be relied upon,” it said on 28 November.
Farfetch was among the big winners from the pandemic as online shopping boomed, but has since lost its way.
Employing thousands of people, it continues to be loss-making.
It was founded in London in 2007 as a marketplace for luxury boutiques from around the world.
The business now connects customers in more than 190 countries.
In recent weeks it has initiated a process to sell a number of subsidiaries – including Browns, a luxury retailer.
It is now regarded as being unlikely to complete the acquisition of a stake in Yoox Net-a-Porter, another player in online fashion.
The identities of the other parties talking to Farfetch about providing financing are unclear.
Apollo and Farfetch both declined to comment.
