Farfetch losses widen despite revenue increase

Online luxury retailer Farfetch has revealed its losses widened for FY20 to $3.3bn (£2.36bn) despite its revenues increasing 64% year-over-year to $1.7bn (£1.2bn).

In a trading update announcing its Q4 and FY20 results, Farfetch revealed revenue for the quarter ending 31 December increased 41% year-on-year to $540m (£387m). However, this was offset by a $2.1bn (£1.5bn) non-cash impact of “higher share prices on items held at fair value and remeasurements” which led to it posting a loss-after-tax of $2.3bn (£1.65bn) for the quarter.

It comes as the retailer reported “strong” Q4 2020 Gross Merchandise Value and Digital Platform GMV growth – up 43% and 49% year-over-year to “record highs” of $1.1bn (£788m) and $939m (£673m), respectively.

As such, Q4 2020 marked Farfetch’s first ever quarter of positive adjusted EBITDA – up to $10m (£7.1m) from an $18m (£12.9m) loss in Q4 2019.

José Neves, Farfetch founder, chairman and CEO said: “2020 put the Farfetch platform to the test, but thanks to our robust capabilities, resilient operations and utmost perseverance from our more than 5,000 Farfetchers, we rose to the challenge and enabled our nearly 1,400 Marketplace sellers and Farfetch Platform Solutions clients to continually serve millions of luxury consumers across the globe.

“We cemented our leadership as the largest global online destination for luxury fashion, accelerated our Chapter 2 initiatives with strategic partnerships advancing our position to be the global platform for the luxury industry, and demonstrated the scale and attractiveness of our business model as we achieved the key milestone of Adjusted EBITDA profitability in the fourth quarter.”

He added: “As we enter 2021, I am more energised than ever by the prospects of leveraging our incredible achievements to date and our unique platform capabilities to go after the significant growth opportunities we see in our vision to be a digital enabler connecting the creators, curators and consumers of the global luxury industry, both online and offline – a nearly $300bn (£215bn) opportunity we remain laser-focused on and plan to continue investing behind to deliver significant value over the long-term.”