Luxury technology platform Farfetch has reported positive progress in its second quarter, despite still operating at a loss. The company saw an increase in Gross Merchandise Value (GMV) for Q2 2022, rising by 1.3% year-over-year (YoY) to reach $1 billion (7.6% in constant currency). While the Digital Platform GMV fell by 3.3% to $883.1 million, it rose by 1.6% in constant currency. The Brand Platform GMV experienced significant growth of 47.3% to $107.1 million. Additionally, the company’s revenue increased from $523.3 million to $579.3 million. Farfetch also witnessed an increase in gross profit margin, reaching 46.2%. Profit after tax stood at $67.7 million, benefiting from a one-off non-cash benefit. However, adjusted EBITDA widened to a loss of $24.2 million due to increased costs.

Amidst these financial figures, Farfetch announced some noteworthy developments during the quarter. The company formed a strategic partnership with luxury brand Salvatore Ferragamo, emphasizing its commitment to enhancing its digital and omnichannel strategy. Farfetch is also leveraging Media Solutions to engage a younger audience and exploring Future Retail innovations. In terms of client additions, Farfetch Platform Solutions (FPS) included global monobrand e-commerce site Sacai. Furthermore, the company collaborated with renowned brands like Karl Lagerfeld, De Beers, and Chopard on special campaigns. Farfetch launched exciting collaborations including Opening Ceremony and Peter Do, as well as Interview Magazine and Tabboo for its new fashion-meets-culture retail series, Farfetch BEAT. Notably, Farfetch’s New Guards brands were involved in various partnerships, such as Off-White collaborating with Major League Baseball and New Era Capsule, and Church’s for their genderless capsule collection. Palm Angels also added a new store in Milan, while Heron Preston collaborated with BAPE for a limited edition capsule collection.

Farfetch CEO José Neves expressed the company’s ambition to become the leading global platform for luxury. He believes that their acquisitions, activities, and developments, including the YNAP acquisition and the partnership with Richemont, will contribute to achieving this vision. Neves is optimistic about the future, particularly in 2023, when the company expects to see the benefits of recent deals with Reebok, Neiman Marcus Group, and Salvatore Ferragamo. Additionally, he anticipates China to provide positive growth and foresees cost rationalization in 2023.

Looking ahead, Farfetch anticipates Digital Platform GMV growth of 0%-5% YoY for the full year and Brand Platform GMV growth of 0%-10%. The company aims to break even on an adjusted EBITDA basis. Despite ongoing losses, Farfetch remains optimistic about its long-term prospects and its position in the luxury market.

Useful links:
1. Farfetch Q2 2022 Financial Results
2. Farfetch YNAP Acquisition Announcement