The Aptos Growth Retailer of the Year was awarded to Farfetch because of the fashion hub’s exponential rise to become a challenger to the likes of Net-a-Porter.
Connecting independent fashion sellers to shoppers around the world, Farfetch is the epitome of a growth retailer.
It was founded in London by Portuguese entrepreneur José Neves in 2008, and now generates sales of close to £90m.
The etail business was born out of a desire to allow independent fashion boutiques to sell online without having to invest in their own online infrastructure.
Farfetch gives these retailers access to its hugely popular website that receives more than 10 million visits a month, allowing them to compete on an even footing with global luxury etailers such as Net-a-Porter.
$1bn: Farfetch’s value at its last round of investment in 2016
Farfetch receives a commission on each sale and arranges for the delivery of goods through third parties. It also adds editorial content on luxury fashion, lifestyle and travel to the site.
The success of this approach was demonstrated in its latest financials. Farfetch reported that the transactional value of sales made through its website increased by more than two thirds to £302.1m in 2015. That compared with sales of just under £50m three years earlier.
During the year, it teamed with more than 400 boutiques, showcasing a combined range of more than 150,000 unique products on the site.
An affluent target market
Farfetch benefits from relatively high average transaction values owing to its focus on luxury fashion. The curated offer targets affluent shoppers with high disposable incomes, described by the business as being “well travelled” and “early adopters”.
It also operates a highly international business, with UK customers accounting for just 10% of transactional sales in 2015. Underlining this international focus, the etailer has opened offices in nine countries, although it remains headquartered at ‘Silicon Roundabout’ in East London.
Neves is a seasoned entrepreneur who founded his first business, a technology start-up, while still at university in Portugal. He established footwear brand Swear in London in 1996 and launched B-Store, a designer footwear retailer, in 2001.
However, Farfetch has allowed Neves to combine his passion for technology and fashion and he remains firmly in charge as chief executive.
Bricks and mortar
The etailer’s growth has caught the eye of investors too. In its latest investment round in 2016 it received $100m, and its roster of investors includes media company Condé Nast and private equity firms Vitruvian Partners and Advent.
“The vision is to answer the question ‘how will people shop for luxury fashion five or 10 years into the future?’ The answer, we believe, will be a seamless merge of a fantastic physical experience with powerful, yet subtle technology”
José Neves, Farfetch
The business was valued at more than $1bn, making it one of the few privately-owned ‘unicorn’ businesses in the fashion sector.
Farfetch has used its financial backing to make a move into physical retailing. It acquired the London-based Browns boutique in 2015 and is using the store to test new retail technologies.
Neves has said: “The vision is to answer the question ‘how will people shop for luxury fashion five or 10 years into the future?’ The answer, we believe, will be a seamless merge of a fantastic physical experience with powerful, yet subtle technology.”
The Aptos Growth Retailer of the Year is based on a methodology developed by Retail Week Prospect, a live digital intelligence platform covering the technology and ecommerce strategies of the most innovative retailers in the UK.
The award is based on the financial metrics of retailers, with particular weight given to sales growth.
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