The Business of Fashion Podcast
Farfetch’s José Neves Says Profitability Is Still Possible in 2021

Farfetch’s José Neves Says Profitability Is Still Possible in 2021

July 9, 2020

LONDON, United Kingdom —For Farfetch Founder and Chief Executive José Neves, the last six months have not only been about protecting his own business from the fallout of Covid-19, but also supporting the hundreds of boutiques around the world — from China, Japan and Korea to the Middle East and Europe — that sell their goods online through the luxury marketplace.

“We've been able to support the boutiques and the brands on the platform at crucial time where online is, for many, the main channel and for some... the only channel,” Neves told BoF Editor-in-Chief Imran Amed in the latest episode of The BoF Podcast.

But as Neves explained, more challenges lie ahead for Farfetch and the global fashion industry at large.

  • Neves described the platform’s performance as “very solid,” and expects to see an acceleration in its second quarter, with year over year growth of 25-30%. Part of this success can be attributed to the business shifting its focus to markets where consumer sentiment has started to recover, according to Neves.
  • But Farfetch is still losing money, and investors and market analysts have questioned the company's recent acquisition of New Guards Group (NGG). The acquisition may have bolstered profitability, but it took the business in an unexpected direction: actually owning the brands it sells on its platform. But Neves said he remains “confident” that Farfetch will achieve profitability by 2021 — a goal it outlined last year, and that the NGG business is a brand platform in its own right.
  • The luxury industry has been bracing for what has been called “the mother of all sales,” as retailers are forced to drastically discount their surplus of spring merchandise. Some observers have pointed to Farfetch as a regular culprit with respect to the industry's discounting addiction even before the Covid-19 pandemic. Neves says the discounting decisions are made by the brands and the retailers themselves, and that Farfetch is simply the platform they use to go to the market, but acknowledges that deep discounting is a systemic industry problem.
  • Neves believes the fashion industry will finally reckon with its wasteful and unsustainable business practices — and partially because it can also reduce costs. “I do think the industry had an oversupply problem, which is an environmental problem as well," he said. “Platforms have a responsibility to… incentivise customers to shop consciously. By doing that you create an incentive for brands to be more conscious or to be totally ethical and sustainable if they can.”

 

Related Articles:

A Cloudy Picture at Farfetch

Farfetch Signals Growing Ambitions in Resale

Why Farfetch's Free-Spending Ways Have Some Investors Concerned

 

Watch and listen to more #BoFLIVE conversations here. To contact The Business of Fashion with comments, questions, or speaker ideas please e-mail podcast@businessoffashion.com.

 

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Special Edition: Luca Solca on ‘The Worst Year in the History of Modern Luxury’

Special Edition: Luca Solca on ‘The Worst Year in the History of Modern Luxury’

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BoF’s Imran Amed and the Bernstein analyst discuss what the sector should expect as coronavirus threatens sales and supply chains.

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Special Edition: Retail Futurist Doug Stephens on How Coronavirus Will Shift Consumer Behaviour

Special Edition: Retail Futurist Doug Stephens on How Coronavirus Will Shift Consumer Behaviour

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As the pandemic jolts global markets and consumption habits, Imran Amed and Doug Stephens discuss the mindset fashion companies should adopt to stay above water.

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Serena Williams on Being a Modern Entrepreneur | Inside Fashion

Serena Williams on Being a Modern Entrepreneur | Inside Fashion

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Speaking in conversation with Imran Amed at BoF West, the tennis champion unpacks how she balances life as an athlete with entrepreneurship and motherhood.

To watch Serena's and Imran's conversation at BoF West 2019 click here

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Inside Moda Operandi’s Data-driven China Expansion Plans | Inside Fashion

Inside Moda Operandi’s Data-driven China Expansion Plans | Inside Fashion

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Imran Amed sits down with co-founder and chief brand officer Lauren Santo Domingo and chief executive Ganesh Srivats to discuss their plans to enter the Chinese market and capitalise on the 'crystal ball' of data.

To watch the video of the conversation click here.

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Stadium Goods’ John McPheters on the Streetwear Resale Opportunity | Inside Fashion

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In his first one-to-one interview since the acquisition by Farfetch, the Stadium Goods co-founder talks to Imran Amed about his unconventional way into fashion, how he nearly ended up in the diamond industry, and defying the ‘streetwear bubble.’

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This episode of Inside Fashion is brought to you by Klarna.

Stephanie Phair on Nurturing Fashion’s Future Female Leaders | Inside Fashion

Stephanie Phair on Nurturing Fashion’s Future Female Leaders | Inside Fashion

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In conversation with BoF’s Imran Amed, in front of 150 fashion professionals from the BoF Careers community, Farfetch’s chief strategy officer and chair of the British Fashion Council Stephanie Phair shared her insight on how fashion can better support gender diversity within the workplace. As the global #MeToo movement has spotlighted sexual misconduct within creative industries, this issue has gained increasing momentum, sparking industry-wide conversation on the continuing gender imbalance in the fashion sector.

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