Fitch places Farfetch on negative watch

Fitch Ratings said it placed Farfetch Ltd.'s B- issuer default rating and BB- senior secured term loan rating on rating watch negative.

“The RWN reflects increased uncertainty around Farfetch's path to profitability after it recently announced that its prior forecasts or guidance should no longer be relied upon. Our rating case had considered management guidance and assumed that Fitch-adjusted EBITDAR would turn neutral to positive in 2023 before improving strongly over 2024-2025. Farfetch's failure to meet these expectations would increase liquidity and refinancing risks and could result in a multi-notch downgrade of the IDR and instrument rating,” Fitch said in a statement.

The agency said it aims to resolve the RWN after it gets Farfetch’s third-quarter results and updated guidance on its medium-term business performance and strategy.

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