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Farfetch swings to £1.65bn loss despite soaring revenues

// Farfetch posts full-year loss after tax of £1.65bn
// Full year revenue increased by 64% year-on-year to £1.17bn
// Revenue for the quarter ending December 31, 2020, rose by 41% year-on-year, to £387m

Farfetch has reported a full-year loss after tax of $2.3 billion (£1.65 billion), despite a soar in its revenues and profits.

Full year revenue at the online fashion retailer increased by 64 per cent year-on-year to $1.64 billion (£1.17 billion).

Revenue for the quarter ending December 31, 2020, rose by 41 per cent year-on-year, to $540 million (£387 million).

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Gross Merchandise Value (GMV) for 2020 exceeded $3 billion (£2 billion), up 49 per cent for the year.

The retailer’s loss before tax included $2.1 billion non-cash impact of higher share price on items held at fair value and remeasurements.

It made a loss after tax of $110 million (£78 million) in for fourth quarter in 2019.

Gross profit for 2020 was $770 million (£552 million), but Farfetch made a loss after tax of $3.3 billion (£2.36 billion – almost ten times that of its $373 million loss at the end of 2019.

Farfetch achieved its first ever quarter of positive adjusted EBITDA. The last quarter of 2020 adjusted EBITDA increased to $10 million (£7 million), up from a loss of $18 million (£12.9 million) in Q4 2019.

“2020 put the Farfetch platform to the test, but thanks to our robust capabilities, resilient operations and utmost perseverance from our more than 5000 Farfetchers, we rose to the challenge and enabled our nearly 1400 marketplace sellers and Farfetch Platform Solutions clients to continually serve millions of luxury consumers across the globe, Farfetch founder, chairman and chief executive José Neves said.

“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.

“As we enter 2021, I am more energized 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 $300 billion opportunity we remain laser-focused on and plan to continue investing behind to deliver significant value over the long-term.”

Farfetch chief financial officer Elliot Jordan said: “The strong performance of Farfetch in the fourth quarter completes a remarkable year and is the result of our focused execution against the long-term strategy and the leveraging of our investments to date.

“We exceeded our own initial expectations for the year; accelerating growth in our digital platform, improving margins across all areas of the business and delivering strong operating cash flows.

“As a result, we delivered our first ever quarter of positive adjusted EBITDA. Our industry partnerships and strategic alliances, as well as our $1.6 billion of liquidity, position us well to continue investing behind the long-term growth opportunities we see in digitally enabling the luxury industry.”

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The post Farfetch swings to £1.65bn loss despite soaring revenues appeared first on Retail Gazette.



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