Farfetch returns to profit as luxury shoppers continue to turn online to buy

Farfetch says that it is now well placed for an “incredible” 2022 as shoppers continue to turn online – and to its marketplace for boutiques and brands – to buy luxury goods. It has returned to profit in its latest full-year from a previous multi-billion loss.

Farfetch, ranked Leading in RXUK Top500 research, is a brand owner through its New Guards business, and has bought luxury beauty curation site Violet Grey in anticipation of beauty brands launching on the Farfetch marketplace later this year.

It is now the exclusive partner for Reebok’s luxury collaborations, through an agreement between Farfetch’s New Guards brand business and the Authentic Brands Group. And in December 2021, it acquired Luxclusif, a B2B company that enables the acquisition, authentification and sale of second-hand luxury goods.

Farfetch this week reported revenue of $2.3bn (£1.7bn) in 2021 – 35% higher than the previous year. Gross merchandise value (GMV) for the year came in at $4.2bn (£3.1bn), 33% up on the previous year, and 98% higher than in 2019. In the fourth quarter of the year alone, 85% of the $1.3bn (£0.97bn) value sales made via its platform – or GMV – was via third-party transactions, from which Farfetch earns 30.4%. More than 1,400 sellers now trade on the marketplace, and in the fourth quarter of 2021 they supplied more than 10m items to customers.

Pre-tax profits for 2021 grew to $1.5bn (£1.1bn) from a loss of $3.3bn (£2.5bn) in 2020, and in the fourth quarter of the year to $98.6m (£73.6m) from a loss of $2.3bn (£1.7bn) last time.

José Neves, Farfetch founder, chairman and chief executive, says Farfetch’s figures show the momentum that the platform now has. “This positions Farfetch for an incredible 2022 focused on continuing to lead the online luxury fashion industry, growing faster than the runner-ups, and expanding profitability,” he says.

“As we enter a post-pandemic environment, I am proud of the support Farfetch has provided to our partners across the global luxury community during this unprecedented time as we advanced our mission to be the connector between the curators, creators and consumers of the luxury fashion industry.

“Moreover, we are positioned to emerge stronger than ever, as an industry leader delivering strategic value to brand partners and an unmatched proposition for consumers. And the accelerated digitization of the luxury industry highlights the opportunity to leverage the unique capabilities of the Farfetch platform, to extend our track record of capturing market share while delivering further profitability.”

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