Farfetch was valued at $6.3bn when it initially went public in 2018, with shares selling at $20.
Investors were buoyed by booming luxury fashion sales at the time and willing to look past the company’s losses, which stood at £75.7m the year it listed.
Farfetch has a deal to sell Burberry’s clothing around the world and has also teamed up with Gucci to offer a 90-minute delivery service for the Italian fashion house’s clothes and accessories. It sold products worth $1bn over its platforms in the three months to the end of June.
After touching a high of more than $73, Farfetch’s share price has since collapsed to just $1.71 after a series of announcements shook investor confidence. The company is now valued at $581m.
In 2019, more than $2bn was wiped off its market value in a single day after it blindsided investors with a surprise $675m takeover of fashion label New Guards Group, owner of the licence for fashion label Off White, and reported larger-than-expected losses.
Shareholders and analysts accused management of a dramatic shift in strategy from a low-risk, shop front model to a company that owned brands, shops and stock. Hedge funds began heavily shorting its shares.
Mr Neves later defended the rationale for the deal, pointing out that New Guards Group was generating significant income and arguing that the “acid test” for the deal would be “in five years, ten years, not in August, September, October.”
Investors have also expressed concerns about spiralling costs. The company lost $455.6m after tax in the first six months of the year on revenues of $1.1bn.
Bernstein analyst Luca Solca, a longstanding critic, has accused Farfetch of burning cash “too fast”.
Mr Solca told The Telegraph: “The business needs to be restructured and refocused.”
A spokesperson for Farfetch declined to comment.