Farfetch purchases New Guards
The British-Portuguese luxury online retail platform Farfetch has announced the acquisition of New Guards.
New Guards is an on-line retail platform with brands such as Off-White, Palm Angels, Marcelo Burlon County of Milan, Heron Preston, Alanui, Unravel Project and Kirin Peggy Gou.
According to Farfetch CEO José Neves the purchase will enable the company to “uniquely position itself as a magnet for designers, curators and consumers while helping to preserve the group’s values”.
However, the online retail fashion platform has closed the second quarter of 2019 with losses of €80 million.
The amount of loss represents an increase of 406.9% on losses recorded for the same period in 2018 when they stood at €17.6 million.
Despite these losses, they were not so steep as the haemorrhages seen in the first quarter of the year when the company registered a loss of €109 million.
However, business turnover (Gross Merchandise Value) achieved a record in the second quarter of €435 million, up 44% like-for-like.
Revenues stood at €186 million compared to €174 million achieved in the first quarter.
“The losses were mostly down to an annual increase in operational losses which went from $36.8 to $95.8 million, partially caused by a reduction in non-realised exchange rate losses on the revaluation of accounts receivable in US dollars.
“Our exposure to overseas exchange gains and losses fell after a change to the working currency of our main legal company, Farfetch UK Limited from pounds sterling to US dollars from 1 January 2019”, states Farfetch in a communiqué.
Growth in business turnover was down to a growth of 55.7% in consumer numbers who shop on the online platform which now stands at 1.8 million shoppers.
Despite the losses, José Neves, CEO of Farfetch says he is satisfied with the results. “As we approach our first anniversary as a public company (21 September), I am delighted with the progress that we have made in carrying out our vision for our second chapter — building a global platform which will provide the lion’s share in terms of growth of €1Bn expected for the luxury online industry”.