Shares of luxury fashion e-commerce platform Farfetch (FTCH -2.22%) fell 8.5% on Tuesday, dragging the stock back toward its record low reached just last week. Although the company itself did not report it (and has neither confirmed nor denied it), industry news site Business of Fashion reports the struggling online-shopping platform is looking for an investor before running out of cash before the end of this year.

The suggestion isn't all that "far-fetched," of course, given what the company has confirmed of late.

"Prior forecasts or guidance should no longer be relied upon"

Farfetch's struggles aren't exactly undocumented. Through the first half of 2023, the company lost just under $500 million on a little more than $1.1 billion in revenue, with $300 million of that year-to-date loss being booked in the second quarter alone. Sales growth is slowing down, while losses are accelerating.

It's the company's failure to report its third-quarter results when originally scheduled, however, that cemented investors' worries into place. Rather than posting its Q3 numbers as slated, on Nov. 28 a statement from the company explained that Farfetch "will not announce its third-quarter 2023 financial results and will not hold its related conference call previously scheduled for Wednesday, Nov. 29, 2023," adding "The company expects to provide a market update in due course."

That's a red flag in and of itself. It was an additional piece of the statement, though, that lends credibility to Business of Fashion's reporting today. Farfetch goes on to say, "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's the sort of language that all too often precedes the surfacing of serious existential problems.

Fanning Tuesday's bearish flames is reporting from Fashion of Law suggesting that Farfetch's founder and CEO José Neves is now the subject of a lawsuit being levied by shareholders, claiming the company's chief made "materially false and misleading statements regarding [Farfetch's] business, operations, and prospects."

Not even with a 10-foot pole

Farfetch may have an effective turnaround plan that's ready to implement. There's no denying that luxury consumers aren't often deterred by economic lethargy.

As the old adage goes, though, where there's smoke, there's fire. With or without any willful malfeasance, something's clearly wrong with this luxury apparel company. It's dishing out more drama than any investor wants in their portfolio. And, it's got no period in its existence as a publicly traded company it can point to as evidence that it's even capable of turning a sustained operating profit.

Just steer clear of this one. It's not even a compelling high-risk prospect to take a flier on.