Luxury fashion retailer Farfetch has reported positive results for its fiscal second quarter, showing signs of recovery in the luxury sector. The company experienced a 40% year-on-year increase in gross merchandise value (GMV), surpassing $1 billion in the quarter. Compared to the same quarter in 2019, GMV more than doubled, indicating a notable shift in consumer behavior towards online shopping since the global pandemic.
Farfetch also witnessed strong growth in full-price sales, which contributed to a 40% increase in digital platform GMV compared to the previous year and an impressive 89% increase compared to two years ago. Overall revenue soared by 43% compared to 2020, reaching $523 million. The gross profit margin improved by 30 basis points year-on-year to 44%, although the digital platform order contribution margin declined by 90 basis points to 34%. Notably, post-tax profit amounted to $88 million, a significant improvement compared to the $436 million loss in the previous year. It is important to mention that the latest figure included a $246 million non-cash benefit resulting from the impact of the lower share price on items held at fair value and re-measurements. Additionally, the adjusted EBITDA improved to a loss of $21 million, compared to a loss of $25 million in Q2 2020.
During an active quarter, Farfetch Marketplace continued to offer customers a wide selection of luxury fashion, featuring over 390,000 Stock Keeping Units (SKUs) from nearly 1,400 sellers. The supply from both multi-brand retailers and e-concession partners also continued to increase. To enhance the customer experience, the company launched various exclusives and improved platform capabilities for its Farfetch Platform Solutions clients, including live chat, enhanced personalization, and re-purchase capabilities for pre-owned products. Furthermore, Farfetch initiated a pilot program called Farfetch Connected Retail, which aims to provide omnichannel, personalized experiences for consumers and drive footfall to physical retail locations.
Aside from financial achievements, Farfetch made strategic moves during the quarter. One of these moves included the launch of kidswear on Brownsfashion.com. The company also increased its ownership of the operating company and trademark of Palm Angels. José Neves, founder, Chairman, and CEO of Farfetch, expressed admiration for the luxury industry’s resilience and the strong growth the company has achieved. He emphasized Farfetch’s role as a close partner for retailers and brands during this time and highlighted the company’s progress towards becoming the global platform for luxury. Neves also noted the importance of initiatives such as China expansion, Farfetch Platform Solutions, Farfetch Connected Retail, and the Luxury New Retail vision in driving future success.
For more information about Farfetch’s positive results, click here. To explore Farfetch’s range of luxury fashion, visit their website here.
