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Full-year sales soar at Farfetch but losses widen

Full-year revenue rocketed 56% to $602m (£454m) at Farfetch in what it called a “blockbuster year” ended 31 December 2018, and it has announced a new deal to acquire JD.com’s Chinese luxury ecommerce platform, Toplife.

Farfetch said the 2018 financial year – during which it floated on the New York Stock Exchange – exceeded its expectations. It recorded a record gross merchandise value (GMV) of $1.4bn (£1.05bn) for 2018, up 55% on the year before.

However, it made a loss after tax of $155.5m (£117.5m), compared with a $112.3m (£84.8m) loss in 2017. Its adjusted EBITDA loss also widened from $58m (£43.8m) in 2017 to $95.9m (£72.4m).

There was an improvement in the fourth quarter, when it reduced its loss after tax by 81.9% to $9.9m (£7.5m), and made an adjusted EBITDA loss of $14.6m (£11m), compared with a loss of $23.4m (£17.7m) in 2017.

Revenue soared 55% to $195m (£147m) during the quarter, and its GMV climbed by 33% to $466.4m (£351.8m).

Farfetch said the narrowed Q4 losses reflected “benefits from our prior period investments to support our growth as well as improved efficiencies in selling, general and administrative expenses”.

Six new brands were added to its luxury ecommerce platform Black and White Solutions during the fourth quarter, including JW Anderson and Emilio Pucci – bringing the total to 17 by the year end.

Farfetch also rolled out customer loyalty initiative Access last year, giving members benefits such as early access to events and sales, free shipping, an extended returns period and personal styling.

Since the year end, it has announced a partnership with Harrods to provide the luxury department store’s global ecommerce platform, and completed the acquisition of sneaker and streetwear marketplace Stadium Goods.

The London-based business has also agreed to acquire Toplife, which will be integrated into Farfetch’s own Chinese platform.

CFO Elliot Jordan said: “I am thrilled with our record GMV performance and the growth of Farfetch during 2018, which exceeded expectations. Our increasing scale has enabled us to leverage our efficiencies and lean into our customer proposition with new initiatives such as our Access loyalty program, to boost the lifetime value of our customers and enhance long-term shareholder value.”

Founder, CEO and co-chair José Neves added: “By all measures, 2018 was a blockbuster year for Farfetch. We continued to lead the online personal luxury goods market, growing GMV 55% for the year – more than twice as fast as the industry.

“We also exited our first decade as a company with an incredible foundation for realising our platform vision globally, including in China, with the announced acquisition of Toplife solidifying Farfetch as the premier luxury gateway to China.”

For the first quarter of 2019, Farfetch expects platform GMV to grow by about 40% year on year.

 

 

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Readers' comments (3)

  • Is it only the clothing industry where (significant) losses can be celebrated? Appalling set of figures.

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  • Blockbuster year ! Losses after tax of US$155.5m.... are you serious? What’s the plan to start making money?

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  • I've been told at various times in my career that the Rag Trade is not about making money. If not, then what is it about? Other than keeping KPMG in business.

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