Farfetch revenues surge but profits elusive as it invests in growth
Farfetch is seeing fast-rising sales but its losses have also widened as the company continues to invest in growth and sacrifice profit ahead of an expected US IPO. That’s the main message from the London-based firm’s latest accounts that were filed this week.
The e-tailer said the value of goods sold on its site came close to doubling at almost £548 million last year with overall revenue for the business, which acts as a marketplace for luxury fashion retailers, also surging. But the company’s net loss widened.
Its accounts for the year to December 31 showed that with the firm now selling over half a billion pounds worth of goods through its platform, it’s undeniably on the rise. And with its deal with Condé Nast to take over the functions of the shuttered style.com operation, it has plenty more growth potential ahead. The accounts showed it made a $12.5 million share payment to take over those ops.
Diving deeper into the detail of its performance, Farfetch said its gross merchandise value - which covers the value of all the goods sold by its retailer partners through its site - surged 81% to £547.9 million last year. The company’s own revenue was up an almost-as-good 74% to £151.3 million. The company mad a net loss of £34 million, that figure having grown 18% compared to the prior year, as well as an underlying operating loss that edged up to £24.9 million. But the loss on an ebitda basis dropped slightly to £21.77 million from £22.89 million.
The London-based firm has deals with over 700 shops and a global presence that makes it a serious player in the growing online luxury sector. Importantly, those 700 shops also help it to offer an interesting mix of well known and up-and-coming labels and also cater to different tastes around the world.
Of its own more-than-£151 million revenue figure, only £12 million came from the UK, with £40 million from elsewhere in Europe and £98 million from the rest of the world.
The nine-year-old company also said it now gets 21 million visits a month to its website and is still seeing “strong demand,” although it gave no other details on current trading.
Despite being lossmaking, it was last year valued at $1.5 billion following a fundraising round. A further fundraising of almost $400 million from JD.com happened this year and while it hasn’t been officially revalued, rumours persist that it will launch a US IPO imminently which could see a valuation of $5 billion.
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