Luxury e-tailer Farfetch reported a sharp rise in third-quarter sales as it benefits from the growing trend of buying high-end products online.
Revenues for the three months to Sept. 30 soared by 71 percent to $438 million, while gross merchandise value (GMV) increased 62 percent to $798 million. Online GMV grew 60 percent to $674.1 million, boosted by acceleration in the Americas, Europe and Asia-Pacific.
Despite higher sales, the company reported a quarterly post-tax loss of $537 million, up from a $90 million loss a year ago. On an adjusted EBITDA basis, losses narrowed to $10.3 million from $35.7 million a year earlier.
The British company, which recently announced a Chinese joint venture with Alibaba and Richemont, said active customers on its digital platform increased to 2.7 million from 1.9 million.
“The Farfetch platform continued to accelerate in third quarter 2020, setting another quarterly GMV record and further indicating we are witnessing a paradigm shift in favour of online luxury,” said chief executive José Neves.
“The Farfetch platform is not only capturing this opportunity but is helping drive this paradigm shift both for luxury consumers and brands. What we are seeing is the acceleration of the secular trend of online adoption in luxury – an industry that is still very underpenetrated.”
Neves said a focus on delivering full price sales has made Farfetch “a particularly attractive channel for new and existing partners” who see a chance to move away from wholesale toward a direct-to-consumer model.
He added that the rise in online GMV reflects an increased mix of products sold at full price, noting a 70 percent year-on-year reduction in promotional days during the period – a strategy Farfetch intends to continue even as competitors work aggressively in response to more Covid-19 restrictions in the run-up to Christmas.
Farfetch forecast fourth-quarter gross merchandise volume of $880 million to $910 million for its digital platform, up 40 percent year-on-year, and positive adjusted core earnings.