Farfetch, the leading luxury platform, has surpassed expectations in 2021 and Q4 with its impressive performance. The company reported a record gross merchandise value (GMV) of $4.2 billion for the year, a 33% increase compared to the previous year and a remarkable 98% surge compared to 2019. Furthermore, its revenue rose by 35% year-on-year to reach $2.3 billion.

In Q4, both GMV and digital platform GMV saw a 22% increase year-on-year, reaching $1.3 billion and $1.1 billion, respectively. Q4 revenue also saw a significant jump of 23% to reach $666 million.

One notable achievement for Farfetch in Q4 was its net profit of $97 million, a significant improvement compared to the loss of almost $2.3 billion in the previous year. This positive outcome includes a non-cash benefit of $217 million due to the impact of its lower share price on fair value items and re-measurements. Overall, the net profit for the year amounted to $1.47 billion, a substantial turnaround from a loss of $3.3 billion in 2020.

Farfetch also achieved a quarterly gross profit margin of 47.1%, up from 46.1% the previous year. The full-year gross profit margin also saw an increase to 46.1% from 45%. However, the digital platform order contribution margin dropped to 32.4% in Q4, compared to 35.1% in the same period in 2020. For the full year, the margin decreased to 31.6% from 35%.

The founder and chief of Farfetch, José Neves, expressed his optimism about the company’s future, emphasizing their focus on leading the online luxury fashion industry, surpassing competitors in growth, and expanding profitability. Neves believes that the strong momentum behind the platform positions Farfetch for an incredible 2022.

The company’s strong performance can be attributed to several key developments throughout the year and in the final quarter. Farfetch highlighted that third-party transactions accounted for 85% of digital platform GMV, with a take rate of 30.4% in Q4. The Farfetch Marketplace also experienced an increase in supplies from both multi-brand retailers and e-concession partners, resulting in a total stock of nearly 10 million units in the quarter.

Additionally, Farfetch saw its third consecutive quarter of record “media solutions revenue” through collaborations with brands to showcase their collections on the Farfetch Marketplace. Partnerships such as the Balmain X Netflix, Burberry outerwear campaign, Zegna ‘Working With Words’ film content series, and exclusive launch of the Tasaki Atelier high jewelry collection contributed to this success.

In January, Farfetch made headlines with its acquisition of cult favorite beauty destination Violet Grey, signaling its plans to enter the beauty sector on the Marketplace later in the year. Furthermore, its New Guards operation launched Tmall Luxury Pavilion storefronts for Off-White, Palm Angels, and Ambush in January.

With its strong financial results, positive trajectory, and successful sales performance, Farfetch is well-positioned to maintain its position as a leader in the online luxury fashion industry and drive profitability in 2022.

Useful links:
Farfetch Official Website
Business of Fashion Website