What: Following its YNAP acquisition in August of this year, Farfetch lays out plans to reach profitability and secure the luxury market.

Why it is important: The company’s near-term focus is on profitability with expectations of gross profit and order contribution margins to improve in 2023 but expects the costs of new partnerships to amount to around USD 170 million.

In 2023, the company expects GMV to increase 20 to 22% year-on-year compared to the 2022 outlook, reaching USD 4.9 billion, driven by underlying business growth and GMV from signed partnerships. Farfetch has been struggling with GMV this year: in the most recent earnings, Q3, it said GMV dropped 4.9% year-on-year; in Q2 it increased 1.3% year-on-year; and, in Q1 it increased 1.7% year-on-year.  Farfetch’s shares dropped 34.9% today during the investor event during which it announced its plans to achieve profitability.

More growth is planned for its Farfetch Platform Solutions business, the whitelabel arm of the company used by Bergdorf Goodman, Ferragamo and others to run their e-commerce sites. By 2025, Platform Solutions is expected to represent USD 4.3 billion in GMV, while its marketplace represents USD 3.8 billion, growing 8 to 10%. Brand platforms, which includes Off-White owner New Guards Group and the partnership with Reebok, are expected to represent USD 1.5 billion.

Farfetch lays out plans for the future