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Farfetch is a marketplace website that puts consumers in touch
with trendy shops around the world that sell major labels and
also enhances access to smaller fashion brands.
The site combines more than 500 boutiques, including L'Eclaireur
in Paris, Maxfield in Los Angeles and Fivestory in New York. It
launched in 2008 with a few boutiques such as Maria Luisa, which
is known for nurturing younger designers.
In May, Farfetch raised $110 million from existing and new
investors, including France's Eurazeo, Singapore sovereign
wealth fund Temasek and China's IDG Capital.
When asked about the prospect of an IPO, Chief Executive and
founder Jose Neves said Farfetch investors had it in mind as an
objective but had not decided yet whether it would take place in
London, New York or Hong Kong.
"We could start considering it in two to three years but not now
as we are still in an intense investment phase," Neves told
Reuters in an interview on the fringes of the Vogue Fashion
Festival in Paris at the weekend.
"It will be the next major financial milestone for the company."
Neves said Farfetch was not planning on floating as early as the
end of next year, as Bloomberg reported on Friday.
Neves, who is Portuguese, said the company, with 1,200 staff and
12 offices worldwide, was still lossmaking but "firmly on track
to become profitable" in the medium term.
He did not give any details on the size of investment which will
go towards opening new offices and boosting technology.
The value of transactions is set to reach more than $800 million
this year, up from over $500 million in 2015. Farfetch takes a
percentage as a commission but does not disclose the exact
level.
Farfetch sells items from more than 1,500 designers, many of
them tiny labels, which it estimates is twice the number carried
by bigger online rivals such as Neiman Marcus or Net-a-Poter. An
advantage of its business model is that it does not carry any
stock.
It competes also against smaller rivals such as Miinto in
Scandinavia and Shoptiques in the United States.
Revenue growth in the past few years has been around 60 percent,
Neves said. "We have seen growth accelerating in the third
quarter and in the fourth and do not expect this acceleration to
stop."
His comments echoed stronger-than-expected results by big luxury
groups for the third quarter, which analysts said augured well
for the end of the year.
(Reporting by Astrid Wendlandt; Editing by Keith Weir)
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