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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The Rise of The Resale Economy | BoF VOICES

The Rise of The Resale Economy | BoF VOICES

February 14, 2020

Vestiaire Collective’s Max Bittner and Depop’s Maria Raga discussed the opportunities and growing pains of the burgeoning resale market at VOICES 2019.

To watch this talk at VOICES 2019 on our YouTube channel click here.

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Inside The State of Fashion 2020 | Inside Fashion

Inside The State of Fashion 2020 | Inside Fashion

November 29, 2019

Listen to BoF's Imran Amed and McKinsey’s Achim Berg discuss the key themes that will define the global fashion industry in the next year.

 

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Noah Founder Brendon Babenzien on ‘Taking Greed Out of the Equation’ | Drive Season 2

Noah Founder Brendon Babenzien on ‘Taking Greed Out of the Equation’ | Drive Season 2

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Brendon Babenzien’s streetwear brand Noah focuses on values and collaboration instead of profit margins and competition.

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Ganni’s Nicolaj Reffstrup on Measuring Ecological Impact Effectively | Drive Season 2

Ganni’s Nicolaj Reffstrup on Measuring Ecological Impact Effectively | Drive Season 2

November 8, 2019

Having turned the Danish womenswear brand from a virtual unknown to a global trendsetter, Ganni's founder discusses how his tech background fuelled his approach.

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Reformation’s Yael Aflalo On Finding a Sustainable Focus | Drive Season 2

Reformation’s Yael Aflalo On Finding a Sustainable Focus | Drive Season 2

October 25, 2019

BoF meets Reformation Founder and CEO Yael Aflalo, who created her brand in 2009 around the idea of upcycling, after years of frustration battling with inefficiencies of the fashion wholesale system.

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Tim Brown on Allbirds’ Sustainable Footwear Revolution | Drive Season 2

Tim Brown on Allbirds’ Sustainable Footwear Revolution | Drive Season 2

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In episode 1 of the new season of BoF’s podcast series Drive, delivered by DHL, the Allbirds co-founder and co-CEO discusses how his high-risk strategy has created a sustainable brand that is disrupting the established footwear market.

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Welcome to Season 2 of Drive | Drive

Welcome to Season 2 of Drive | Drive

September 27, 2019

In a new season of our entrepreneurship podcast series, we hear from six of fashion’s most dynamic sustainable entrepreneurs — Allbirds’ Tim Brown, Eileen Fisher, Everlane’s Michael Preysman, Reformation's Yael Aflalo, Ganni’s founder and Noah's founder — to hear what it takes to make successful businesses sustainable.

The first episode with Allbirds’ Tim Brown launches on October 12, 2019.

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Activist Kalpona Akter on Improving the Lives of Bangladeshi Garment Workers | BoF VOICES

Activist Kalpona Akter on Improving the Lives of Bangladeshi Garment Workers | BoF VOICES

April 22, 2019

Speaking at BoF VOICES, the founder of the Bangladesh Centre for Worker Solidarity outlines her campaign to establish fairer, safer working conditions across the garment industry.

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