The British clothing retailer Farfetch Limited increased its sales significantly in the 2021 financial year and achieved operational profitability for the first time. This emerges from current business figures, which the company published on Thursday evening.
Accordingly, group sales last year amounted to 2.26 billion US dollars (2.02 billion euros), exceeding the level of 2020 by 34.8 percent. In the most important segment, the digital platform business, revenues increased by 37.9 percent to 1.72 billion US dollars. Gross merchandise volume (GMV) increased 32.7 percent to $4.23 billion.
Although operating costs rose, not least due to higher marketing expenses and investments in IT capacities, the group was able to significantly improve its results. Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for special effects, were positive for the first time at USD 1.64 million. In the previous year, Farfetch had reported a corresponding deficit of 47.4 million US dollars.
For 2022, the e-commerce specialist is forecasting further strong growth
The bottom line was a surplus attributable to shareholders of $1.47 billion (1.31 billion euros), after posting a net loss of $3.33 billion in 2020. Like the loss in the previous year, the high profit was mainly due to the different valuation of financial instruments that are linked to the current stock market price.
In the fourth quarter, the group increased its sales by 23.2 percent to 665.7 million US dollars, the GMV grew by 22.0 percent to 1.29 billion euros. Adjusted EBITDA was $36.1 million, more than three times the prior-year period’s figure of $10.4 million.
Farfetch is also expecting strong growth in the current year: The GMV in the “Digital Platform” area is to be increased by 28 to 32 percent, in the “Brand Platform” segment, which includes the group’s own fashion brands, an increase of 20 to 25 percent is forecast . The EBITDA margin adjusted for special effects should reach one to two percent.
The retailer had pushed ahead with its growth plans in recent weeks: in early February, it completed the acquisition of the online cosmetics retailer Violet Gray, and this week it announced an extensive distribution partnership with the Authentic Brands Group for the Reebok brand.