Farfetch aiming for "lion's share" of online luxury market

José Neves, the CEO of online luxury fashion marketplace Farfetch, said on Thursday (28 February) that the company is well positioned to capture “the lion’s share” of the growing online luxury market in the coming years, following a successful start to life as a publicly-listed business.

Farfetch, which began trading on the New York Stock Exchange in September 2018, announced it generated gross merchandise value of $1.4 billion in 2018, with $466 million of that coming in the final three months of the year.

Active consumers using Farfetch were reportedly up by 45% year on year, and the number of orders jumped by 58% in the fourth quarter.

Over the course of the year the company announced several key strategic partnerships, including with UK retailers Harvey Nichols and Burberry, where those businesses will utilise Farfetch's technology platform to aid international growth.

It has also this week unveiled a tie-up with Harrods, which will see the London-based luxury department store leverage its eCommerce technology to sell internationally, and a deal that results in Chinese retail group JD.com’s Toplife merge into Farfetch’s existing China business.

“By all measures, 2018 was a blockbuster year for Farfetch,” explained Neves, who is also founder and co-chair of the business.

"We continued to lead the online personal luxury goods market, growing GMV 55% for the year – more than twice as fast as the industry."

He added: "We also exited our first decade as a company with an incredible foundation for realising our platform vision globally, including in China, with the announced acquisition of Toplife solidifying Farfetch as the premier luxury gateway to China.”

Reflecting on the company’s future path, he explained: "Over the next ten years, the luxury industry is expected to grow to an estimated $500 billion, and online sales will potentially grow to represent an incremental $100 billion opportunity.

“Farfetch is uniquely positioned to capture the lion's share of this opportunity."

The business reported a loss after tax of $9.9 million for the full year, compared to $54.4 million 12 months before.

Technology expense, which the company said was primarily related to research and development and operations of its marketplace features and services, was up by $6 million year on year in the fourth quarter. The organisation has seen a 54.7% increase in technology staff headcount, as well as higher software and infrastructure expenses that it said support the continued growth of the business.