Farfetch losses widen as it snaps up New Guards Group

The retailer posted losses after tax of $89.6m (£73.3m) for the three months ending June 30, 2019, a $71.9m increase on losses during the same period a year ago. It blamed the bottom line pressure on an “increase in the operating loss” and a “decrease in unrealised foreign exchange losses”.

Its adjusted EBITDA loss hit $37.6m (£30.9m) during the period, a 40.7% increase year-on-year.

Farfetch enjoyed a 42.7% spike in revenue during the quarter to $209.3m (£172.1m), driven predominantly by growth in platform services revenue and in-store sales.

The retailer also increased its gross merchandise value to $488.5m (£402.3m), a 44.3% increase year-on-year.

As part of its trading update, Farfetch revealed it has agreed a deal to acquire luxury brands platform New Guards Group for $675m (£555.9m).

New Guards Group was only founded in 2015 and owns brands including Off-White, Heron Preston and Kirin.  

Farfetch’s founder and chief executive José Neves hailed the company’s “market leading growth”. He added: said: “Our unmatched proposition for luxury consumers drove growth beyond not only our expectations, but also the growth of the online personal luxury goods industry, as we continued to gain market share.

“As we approach our one-year anniversary as a public company, I am delighted with our progress in executing on our Chapter 2 vision – to build on our global platform to take the lion’s share of the $100bn growth expected in the online luxury industry.

“Moreover, the industry has only further validated our global e-concession model over the past year as we have seen major luxury groups increase their direct supply on our marketplace while at the same time announcing plans to reduce wholesale distribution, and our overall number of brand and boutique partners continued to increase to now exceed 1,100.”