Farfetch blames future 5 million dollars float for widening losses

The luxury e-tailer revealed Tuesday how heavily it has invested in new technology and attracting new talent as they advanced with their float plans. Despite the promising reported 5 billion dollar initial public offering of shares (IPO), the company’s results have revealed a swelling loss.

New accounts show how Farfetch saw its losses widen by 18 percent to 34 million pounds from 28.7 million pounds in 2015. This was despite gross merchandise value rose by 81 percent to 547.9 million pounds in 2016, according to accounts filed with Companies House. Revenue rose by 74 percent to 151.3 million pounds.

A reported 5 billion dollars float in New York, to blame for Farfetch’s larger loss

Part of this larger loss is to be linked to the 5 billion dollars float in the U.S. the company is tipped for “imminently.” CEO and founder Jose Neves said in August that an IPO is the "next logical stage for the company.”

Commenting the news, founder and CEO Jose Neves said: "Our trajectory of rapid growth and substantial investment continued in 2016, and we are pleased to have seen 81 percent growth in gross merchandise value, as well as strong growth, of 74 percent, in revenues."

Neves said: "Our programme of investment is designed to support the company’s ambitious growth plans, and over the year we focused our investments on technology, as well as customer acquisition and hiring to support our growth. We have very strong foundations in place and will continue to invest and grow our business as we build the definitive technology platform for the luxury industry."

Its home market, the UK, accounted for 12 million pounds of Farfetch's revenue, while another 40 million pounds came from Europe, and the remaining 98 million pounds came from the rest of the world.

Founded in 2008, Farfetch was valued at 1.1 billion pounds in a funding round last year, making it one of Britain's few "unicorns", recalls ‘Market Insider’. Earlier this year, in June, Farfetch raised 313 million pounds from online Chinese mall JD.com. The same month, Farfetch acquired Style.com from Vogue publisher Conde Naste. Accounts show that Farfetch made a share payment worth 12.5 million dollars to acquire the shopping website.

Photo credits:Farfetch Web, UK

 

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