Farfetch, the leading luxury online platform, has recently released its financial results, showcasing both continued losses and remarkable growth in key performance indicators during the lockdown period. Despite challenges, the company, helmed by CEO José Neves, has shown significant progress in various aspects of its business.
During the second quarter of the year, Farfetch witnessed a surge in market share and welcomed a record number of new customers, exceeding half a million. This growth was propelled by a substantial increase in online shopping activity, with traffic surging by 60%. As a result, the company experienced a noteworthy 48% rise in gross merchandise value (GMV), amounting to $721 million, and a 34% increase in Digital Platform GMV, hitting $651 million.
Although Farfetch reported losses, it managed to boost its revenue by an impressive 74%, totaling $365 million. The company also saw an improvement in its gross profit margin, hitting 44%, and a 35% Digital Platform order contribution margin. While the net loss widened to $436 million, primarily due to the impact of its higher share price, Farfetch remains confident in its path to adjusted EBITDA profitability by Fiscal Year 2021, with a narrowed loss of $25 million in Q2.
In a strategic move, Farfetch has been focusing on expanding its directly-owned brand operations, evident in the Q2 Brand Platform Revenue of $66 million. The acquisition of New Guards brands has proved fruitful, with notable performances from Off-White and the rapid ascent of Palm Angels on the Farfetch Marketplace.
Looking ahead, Farfetch is optimistic about further growth in Digital Platform GMV in the current quarter, with anticipated figures ranging from $588 million to $609 million, translating to a 40%-45% year-on-year increase. Additionally, the company recently onboarded four new board members, bringing diverse expertise in technology, e-commerce, luxury fashion, and finance to its leadership team.
Farfetch’s resilience and adaptability, showcased in its second-quarter performance, highlight its positioning for success in the luxury e-commerce sector. The company’s strategic investments and commitment to innovation underscore its readiness to navigate future market challenges and opportunities.
For more information on Farfetch and its latest updates, visit their official website. To delve deeper into the luxury e-commerce landscape, explore insights and analysis on the industry from Vogue Business.
