Farfetch doubles revenue without aggravating first quarter losses

Farfetch managed to escape the effects of the new coronavirus, at least in the first quarter. The luxury fashion sales platform founded by José Neves practically doubled revenues until March, to 331.4 million dollars, without aggravating losses, which reached 79.2 million dollars (+ 1.9% than in the same period of 2019). The company has also reinforced liquidity in recent weeks. 

"When I founded Farfetch 12 years ago, I never imagined that the global platform I built for the luxury industry would be tested in such a devastating crisis", says José Neves, quoted in the earnings release published on Thursday night on the New York stock exchange.

"The investments being made to build a global platform are paying off, with tools such as global logistics capacity, a diversified network of suppliers at a geographical level and localized services for a global consumer base, allowing us to continue our operations", adds the leader of this unicorn (a company valued at more than $ 1 billion).

The diversity of suppliers helps explain how Farfetch kept 85% of the products in the Spring-Summer catalog on sale. Having logistical operations in several countries also made it possible to cross the various phases of the new coronavirus.

While at the end of the first quarter there was a "slowdown in growth in the largest markets in Europe and the United States", coinciding with the containment measures, Farfetch highlights the "encouraging signs" of the Chinese market, which has had an "expressive acceleration in the last few two months" of the first quarter.

Operating margin less negative

The first quarter of the year was also marked by improved operational efficiency at Farfetch. The EBITDA margin was less negative, from -20.7% to -7.4%, corresponding to a negative 22.3 million dollars. In mid-April, Farfetch expected negative EBITDA of between $ 21 and 25 million. 

Thanks to this indicator, the company maintains the objective of presenting operating profit already in 2021.

The company also announced that it completed, at the end of April, a financing operation of 400 million dollars with maturity in May 2027. These 400 million dollars add to the 422 million dollars in treasury registered at the end of March and that already counted on the 250 million dollars of debt issued at the end of January, with the Chinese technology company Tencent and the investment fund Dragoener.