Farfetch losses spiral despite sales gains

The online luxury fashion business booked a loss after tax of $537m (£408m) during the three months to September 30. That compared with a loss of $90.5m (£68.9m) during the same period last year. 

Revenues during the quarter surged 71% to $438m (£333m), while gross merchandise value climbed 62% to a record high of $798m (£607m). 

On an adjusted EBITDA basis, Farfetch narrowed losses to $10.3m (£7.8m) from $35.7m (£27.1m) during the same quarter in 2019. 

The etailer remained in the red as a result of a 63% spike in cost of sales to $228.7m. It said the increased volume of transactions drove up costs associated with delivery and taxes.

Earlier this month, Farfetch secured a $1.15bn investment from Alibaba and Richemont to launch a new Farfetch China joint venture as it seeks to further accelerate sales growth. 

Farfetch founder, chair and chief executive José Neves said: “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.

“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.

“The capabilities developed across the Farfetch platform over the past 13 years in anticipation of the eventual digitisation of the luxury industry uniquely position Farfetch to capture this opportunity today.”