Luxury e-commerce platform Farfetch recently released its Q4 and full-year results for 2022. While the company acknowledged the challenges it faced throughout the year, it maintained a positive outlook. The decline in gross merchandise value (GMV) was attributed to the unprecedented macro headwinds experienced in the luxury industry. In Q4 of 2022, Farfetch’s GMV reached $1.14 billion, compared to $1.29 billion the previous year. For the full year, GMV fell to $4.1 billion from $4.23 billion.
Q4 revenue also saw a decline, dropping to $629 million from $665 million. However, annual revenue rose to $2.3 billion from $2.2 billion. Adjusted revenue for the quarter fell to $545 million from $571 million but increased to $1.99 billion from $1.92 billion over the year.
Although Farfetch reported a loss after tax of $176.6 million in Q4, compared to a profit of $96.9 million the previous year, it managed to achieve an overall profit of $344 million for the full year, albeit lower than the $1.47 billion profit in the previous year. The digital platform accounted for the largest portion of the business, generating quarterly GMV of $1 billion and annual GMV of $3.5 billion. The brand platform saw a slight decline, with Q4 GMV of $100 million, down from $117 million, and $455 million for the full year, down from $467 million.
Despite the challenges faced, Farfetch celebrated record full-year revenue, boasting a 3% increase compared to the previous year and a 12% increase on a currency-neutral basis. While headline GMV showed a 4% decline for the year, it actually rose by 2% on a currency-neutral basis. In Q4, the reported revenue decreased by 5%, but on a currency-neutral basis, it represented a 2% increase. However, the Q4 GMV experienced a significant 12% drop, which accounted for a 5% decrease on a currency-neutral basis. The brand platform also saw a 15% decline in GMV, translating to a 3% decrease on a currency-neutral basis.
The past year has been challenging for global consumer spending due to various factors such as the war in Ukraine, surging energy prices, general inflation, and the ongoing effects of the pandemic. Supply chain disruptions have also had a significant impact on sales across different price levels. Despite these obstacles, Farfetch’s CEO, José Neves, highlighted the company’s ability to achieve currency-neutral growth and gain market share. Neves expressed confidence in the upcoming year, deeming 2023 as the Year of Execution, with growth expected to build throughout the year.
Farfetch also announced that Chief Financial Officer Elliot Jordan will step down by the end of 2023 after serving in the role for over eight years. The company will begin searching for his successor. Jordan played a crucial role in guiding Farfetch through its transformation from a private company to a publicly traded one and its listing on the New York Stock Exchange in 2018. Neves praised Jordan’s contributions and expressed gratitude for his dedication until the end of the year.
Farfetch’s impressive growth is evident in its annual GMV, which has increased from $380 million to $4.1 billion. As a company operating in over 190 countries and territories, Farfetch believes it is well-positioned to lead the industry and continue driving profitable growth. The CFO’s legacy includes establishing strong finance and business services teams that have played a vital role in Farfetch’s success.
For more information on Farfetch’s Q4 and full-year results, visit the company’s official website here.
To learn more about the luxury e-commerce industry and trends, check out this article by The Business of Fashion here.
For insights on consumer spending trends and the impact of various factors on the global economy, read this report by McKinsey & Company here.
