Coronavirus anxiety may be sapping the Dow Jones and the stocks of global retailers, but Farfetch Ltd.’s founder and chief executive officer José Neves believes the online luxury platform has a unique supply model that can buffer the business from the outbreak.
The company’s sales in markets including China, Japan, Korea and Italy are so far undeterred, Neves told WWD in a call Thursday evening, after the company announced a better-than-anticipated fourth-quarter earnings report card that boasted more than $1 billion in revenues in 2019. The company’s shares were up around 18 percent Friday to roughly $11.
The platform’s supply is also relatively unaffected so far, said Neves, given its access to more than $3 billion in third-party inventory spread out across more than 50 countries. Neves has also said though that the company is “monitoring the evolving situation carefully.”
“So far, we have seen no material impact on demand or on supply,” Neves told WWD. “We haven’t seen any significant delays in terms of the logistics platform that we operate.
“From a trading perspective, demand is strong [and] growing faster,” he said. “We hope we can be a positive force in this difficult moment for this industry.”
On Thursday, the company touted its “distributed and diverse supply base” that Neves said includes “thousands of inventory points” in dozens of countries. That would essentially give it more transportation and logistics options than traditional retailers dependant on a China-oriented supply chain.
“We think we’re more resilient and more prepared than a retailer or an e-tailer, who would typically either rely on physical traffic, if you’re a retailer or on one or two or three very few logistics hubs to conduct their business,” he said on an earnings call Thursday.
Meanwhile, the platform continues to grow in China, where it has been ramping up its presence and logistics infrastructure over the past five years. Farfetch also partners with more than 80 luxury brands on WeChat, the social media app owned by Shenzhen, China-based technology platform Tencent, which has invested in Farfetch.
“Our China business is firing from all cylinders,” he said. “This is a dream come true for our community of designers.”
Last year, Farfetch also signaled an alliance with Harrods to set up a global e-commerce platform for the luxury department store. Harrods.com is now live on the Farfetch platform, Neves said Thursday. The Farfetch platform gives Harrods access to services including technical support and logistics to China and elsewhere.
On Thursday, Neves also made the case that the company’s performance vindicates its acquisition strategy that included bringing on the New Guards Group platform last year. New Guards is the licensee of hype-y brands including Off-White. New Guards also drove $36 million in digital sales in the fourth quarter, according to the company.
“I think as the global platform for luxury, it is really important that we are the channel where transactions take place, but also the channel for cultural relevance in this industry,” Neves told WWD. “The destination that fulfills people’s desires and dreams, but we also want to inspire them…and create unique content as only you can find on Farfetch.”