Farfetch this week raised its growth expectations for the year as shoppers’ appetite for buying luxury on fashion online continued unabated.
The luxury platform this week reported revenues of $485.1m (+46%) in the first quarter of its financial year, to March 31, on gross merchandise volumes of $915.6m (+50%). Sales grew as its digital platform revenue grew by 68% to $362.1m, offset by lower revenue from its brand platform. Earnings before interest, tax and one-off costs (EBITDA) came in at a loss of $19.2m, narrowing from $22.3m a year earlier. It reported a post-tax profit of $516.7m, up from a loss of $79.2m a year earlier.
Some 85% of transactions on its digital platform come from third-party brands, while FarFetch’s own New Guards portfolio accounts for the balance. During the quarter, more than 3,500 brands were available on the platform from nearly 1,400 sellers. It hosted livestreams for private clients to talk to brands, and worked with brands including Gucci, Burberry and Tag Heuer to raise the profile of their products and collections on the site.
It also launched its Farfetch storefront on the Tmall Luxury Pavilion, making more than 3,000 brands available to customers via Alibaba. Farfetch, Richemont and Alibaba are working together on a luxury partnership set up amid the disruption of the Covid-19 pandemic with the aim of getting brands up to speed fast on both digital and selling in China.
Farfetch founder, chairman and chief executive José Neves says business has been stronger than expected in the first quarter of its financial year, leading to raise its growth expectations for the full year.
“Our brand partnerships have never been stronger, and our customer and brand building initiatives are resonating well to drive awareness of our value proposition and retention of our valuable consumers,” he says. “I am also very enthused by the positive consumer reaction to our recent launch on Tmall’s Luxury Pavilion, and the momentum building behind our Luxury New Retail vision as we see it being adopted by luxury partners around the world. I am more confident than ever in our position to go after the significant growth opportunities we see as a digital enabler of the global luxury industry – a nearly $300 billion opportunity which we remain laser-focused on and plan to continue investing behind to deliver significant value over the long-term.”