Farfetch, a prominent online fashion retailer, defied the odds and reported a surge in sales in 2020 despite the difficulties brought on by the COVID-19 pandemic. The company’s gross merchandise value (GMV) for the year reached an impressive $3 billion, marking a 49% increase compared to the previous year. Additionally, revenue saw a significant rise of 64% to $1.7 billion. The company’s performance was particularly strong in the fourth quarter, with a GMV growth of 43% and a Digital Platform GMV growth of 49%. During this period, Farfetch achieved record highs of $1.1 billion and $939 million, respectively. Q4 revenue rose by 41% to $540 million, and the margin improved by 310 basis points to 35%.

What sets Farfetch apart is its ability to generate revenue not just through its online platform but also in its physical stores. Despite store closures due to lockdown restrictions, in-store revenue increased by 39.6% to $13.7 million in Q4. This growth was primarily driven by the opening of New Guards stores throughout the year, although it was partially offset by store closures and reduced foot traffic.

Despite the positive results, Farfetch still operates at a loss. The net loss for Q4 amounted to nearly $2.3 billion, a significant increase compared to the $110 million loss reported a year ago. This wider loss includes a $2.1 billion non-cash impact related to the company’s higher share price and re-measurements. However, there is a glimmer of hope as Farfetch achieved a milestone by reporting its first-ever quarter of positive adjusted EBITDA, with a profit of $10 million in this aspect. This marks a significant improvement compared to the $18 million loss in the previous year.

The market response to Farfetch’s results was mixed. Although the company’s shares experienced a decline prior to the announcement and during after-hours trading, they are still trading at higher prices this year compared to most of the time since the company went public. It is worth noting that in the tech sector, sacrificing profits to build market share and scale is a common strategy. However, investors may become impatient.

José Neves, the founder, chairman, and CEO of Farfetch, expressed confidence in the company’s performance. He stated that Farfetch has solidified its position as the largest global online destination for luxury fashion. Neves emphasized the scale and appeal of Farfetch’s business model and highlighted the significant growth opportunities the company sees in digitally connecting the global luxury industry.

CFO Elliot Jordan acknowledged that the Q4 figures and full-year numbers exceeded their initial expectations. Farfetch achieved other noteworthy milestones, including generating 84% of Digital Platform GMV through third-party transactions. The company also expanded its network of marketplace sellers, with over 1,350 sellers offering a wide range of products from more than 3,500 brands. Moreover, Farfetch secured a major partnership with Bosco di Ciliegi, a Russian luxury group that owns multiple monobrand and department stores.

Farfetch also experienced strong momentum in newer categories, particularly in watches and jewelry, which grew nearly three times faster than the overall growth of the Farfetch Marketplace in 2020.

Overall, Farfetch’s performance in 2020 demonstrated its resilience and ability to navigate challenges in an ever-evolving retail landscape. The company’s focus on expanding both its online and in-store channels, as well as its efforts to broaden its network of sellers and forge strategic partnerships, position it well to take advantage of the sustained growth in the luxury fashion industry. With the achievement of positive adjusted EBITDA and the potential to leverage its successes for further growth, Farfetch remains optimistic about its future.

For more information on Farfetch’s performance and future prospects, you can visit their official website: https://www.farfetch.com. Additionally, to gain deeper insights into the luxury fashion industry, you can find valuable resources at: https://www.businessoffashion.com.