Farfetch revenues leap ahead as 2021 starts with a bang
Farfetch has reported another big leap forward in terms of gross merchandise value (GMV) and digital platform GMV as it continues benefit from consumers shifting online both generally and due to the pandemic.
Q1 saw GMV and digital platform GMV rises of 50% and 60% respectively, to $916 million and $790 million. Its Q1 revenue also rose strongly, up 46% year-on-year to $485 million. And it also upgraded its digital platform GMV outlook for the full year.
This all helped net profit to reach $517 million in the first three months of the year, following a loss of almost $80 million this time last year. That said, the net profit was boosted by one-off items and adjusted EBITDA was a loss of $19.2 million, although this was better than the $22.3 million loss of 2020’s Q1.
The company’s founder and CEO, José Neves, said the business “is off to a tremendous start in 2021 with stronger than expected acceleration in the first quarter and higher full-year growth expectations than initially anticipated”.
He added that brand partnerships “have never been stronger, and our customer and brand-building initiatives are resonating well to drive awareness of our value proposition and retention of our valuable consumers”.
He’s also “very enthused by the positive consumer reaction to our recent launch on Tmall’s Luxury Pavilion, and the momentum building behind our Luxury New Retail vision as we see it being adopted by luxury partners around the world”.
Looking in more detail at what happened in Q1, the company said third-party transactions generated 85% of digital platform GMV at a take rate of 29.7%.
The Farfetch Marketplace offered a record number of stock units across more than 3,550 brands from nearly 1,400 sellers “as both multi-brand retailer and e-concession supply growth accelerated, including from our Top 10 brand e-concessions who more than doubled available stock units year-over-year”.
The firm also drove sales as it added interactive livestream events enabling Private Clients to engage with creators of brands such as AZ Factory and JAY AHR.
Other big steps included the relocation of its Browns physical store to an upgraded location on London’s Brook Street; an expanded partnership with Chanel with the implementation of Connected Retail technology in the brand’s boutique in Monaco; and many more initiatives.
While Farfetch is primarily a digital operation, as the Browns move demonstrates, it also operates some physical stores that are highly important in the luxury fashion arena. And it said that the quarter saw in-store revenue increasing by 25.4% to $10.7 million.
While physical stores in certain locations remained closed for much the quarter (especially in Europe), the growth was mainly driven by the opening of additional New Guards portfolio brand stores over the past year. With temporary store closures now ending in many locations, the physical store figures for Q2 and beyond should improve faster.
So it’s no surprise that the firm has upgraded its outlook for Q2 and the full year. In the current quarter, it expects digital platform GMV of between $910 million and $945 million (representing growth of 40%) and brand platform GMV of $50 million to $60 million. It’s also predicting an adjusted EBITDA loss of between $23 million and $25 million.
For the year, digital platform GMV should be anywhere between $3.725 billion and $3.865 billion, representing growth of 35% to 40%.
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