Farfetch has reaped the benefits of being an online-only retailer amid a huge shift to online shopping during lockdowns worldwide, with quarterly sales sky rocketing 90 per cent and a narrower-than-expected loss.
Farfetch said it lost $77.7 million (£62.7 million) in the first quarter ending March 31, compared with a loss of $79.2 million in the same period a year ago.
Meanwhile overall quarterly sales came in at $331 million, better than the forecast loss of $313 million, and gross merchandise value (GMV) was up 46 per cent year-on-year.
The online luxury retailer, which also owns Off White and Browns, said its latest set of results “demonstrate the strength of the platform model within the luxury industry”.
It also said it continued to make market share gains in a quarter characterised by physical store closures.
While Farfetch remained loss-making during the period, it said it was “well-capitalised” and is continuing on its path for adjusted EBITDA profitability in full-year 2021.
The retailer also said demand was strong in the quarter, although towards the latter part of the period it saw a slowdown in growth from its larger markets in Europe and North America as lockdowns began in various countries.
Farfetch said this didn’t have “a material impact on first quarter 2020 results” and despite “encouraging signs in the China region”, where it saw “a meaningful acceleration in the last two months of the quarter”, the retailer recorded a deceleration in group GMV growth in the latter part of the quarter overall.
Meanwhile, the first quarter also saw the February launch of Harrods’ new ecommerce platform, which is powered by Farfetch Platform Solutions.
“When I founded Farfetch 12 years ago, I never imagined that the global platform I was building for the luxury industry would be put to the test in such a devastating crisis,” Farfetch chief executive José Neves said.
“Over the past few months, as we have responded to an ever-changing environment to serve the community of creators, curators, and consumers of this industry, our teams have stretched beyond perceived limits, and demonstrated the resilience of our business model.
“The investments we have made to build the global platform for the luxury fashion industry have been paying off, with features such as our global logistics capabilities, geo-diversified supply network, and localised services for a global consumer base, enabling the continuity of our operations and delivery of our strong first-quarter 2020 results.
“But one thing that has become evident over the past weeks, is that the world will not go back to the same ‘normal’ as we knew it pre-Covid-19.
“As we consider the structural changes that will likely impact the luxury industry, I am confident that our unique set of capabilities position Farfetch to be even stronger in the future.”
Source – Retailgazette.co.uk