Farfetch, the luxury platform, has had a highly successful year in 2021, surpassing expectations and achieving strong performance in both overall revenue and gross merchandise value (GMV). The company reported a record-breaking annual GMV of $4.2 billion, which represents a notable 33% increase compared to the previous year and nearly double the figure from 2019. Moreover, its revenue rose by 35%, reaching $2.3 billion. In the fourth quarter alone, Farfetch experienced a 22% year-on-year increase in both GMV and digital platform GMV, amounting to $1.3 billion and $1.1 billion, respectively. Q4 revenue also experienced significant growth, jumping by 23% to $666 million.
One noteworthy improvement for Farfetch is its gross profit margin, which increased to 47.1% in the fourth quarter, compared to 46.1% in the previous year. The full-year gross profit margin also rose to 46.1% from 45%. However, although there was a slight decrease in the digital platform order contribution margin in Q4 to 32.4%, as opposed to the 35.1% margin in the same period of 2020, there was a more significant decrease from 35% to 31.6% for the full-year.
Perhaps the most significant development for Farfetch is its impressive Q4 net profit of $97 million, marking a substantial improvement from the loss of approximately $2.3 billion in the previous year. It is important to note that this latest figure includes a $217 million non-cash benefit resulting from the impact of the company’s lower share price on fair value items and re-measurements. For the entire year, the net profit was $1.47 billion, compared to a loss of $3.3 billion in 2020.
Founder and company chief, José Neves, expressed his optimism about the performance of Farfetch and its promising future prospects. He emphasized that the figures clearly indicate the strong momentum behind the Farfetch platform, and he also highlighted the company’s achievement of adjusted EBITDA profitability during the past year. Neves firmly believes that Farfetch is well-positioned for an incredible 2022, with a focus on leading the online luxury fashion industry, expanding profitability, and surpassing its competitors.
Farfetch’s success can be attributed to several key developments throughout the year and particularly in the final quarter. During Q4, third-party transactions accounted for 85% of digital platform GMV, with a take rate of 30.4%. The Farfetch Marketplace experienced an increase in supplies from multi-brand retailers and e-concession partners, resulting in a total of nearly 10 million stock units in the quarter. The company also achieved a record quarter of “media solutions revenue” by collaborating with brands to launch innovative showcases of their collections on the Farfetch Marketplace. Notable collaborations included the Balmain X Netflix partnership, the Burberry outerwear campaign, the Zegna “Working With Words” film content series, and the exclusive launch of the Tasaki Atelier high jewellery pearl and colored gemstone collection.
Furthermore, Farfetch made significant moves in January of this year when it announced its acquisition of Violet Grey, a popular luxury beauty destination, ahead of its planned launch of beauty products on the Marketplace later in the year. Additionally, its New Guards operation launched Tmall Luxury Pavilion storefronts for Off-White, Palm Angels, and Ambush.
With its impressive financial results, continuous sales growth, and strategic developments, Farfetch is well-positioned to maintain its leadership in the online luxury fashion industry. The company is expected to further drive profitability in 2022 and beyond.
Further reading:
– Visit Farfetch’s official website for more information: Farfetch Official Website
– Read the article on Farfetch’s acquisition of Violet Grey: Farfetch Acquires Violet Grey
