Smartphone Technology Will Transform This London Fashion Company
By Sarah White
LONDON (Reuters) – London-based online fashion retailer Farfetch plans to roll out new technology to revolutionize shopping in stores in the coming months, its chief executive said.
Farfetch, long tipped for a stock market listing, runs an online marketplace allowing people to buy luxury clothes or accessories from more than 700 brands and boutiques worldwide.
After buying London boutique Browns in 2015, Farfetch is also working on technology that allows customers to flag a wish list of items via their phones when they stroll into a store, or even tell assistants that they are not feeling chatty.
Portuguese CEO and founder Jose Neves, who previously started a shoe brand, said Farfetch is trialing such services and will start adapting them for other brands or boutiques.
“The plan is to this year start rolling out very selectively to other partners,” Neves said in an interview on Wednesday. “We think it’s a tremendous opportunity and it’s actually inevitable. Retail shops still operate in the 80s.”
Online purchases of personal luxury goods should drive a fifth of all sales in the industry by 2025 from 8 percent in 2016, consultants McKinsey forecast this week.
Luxury goods firms including industry leaders like Louis Vuitton owner LVMH or Gucci parent Kering are making a big push to sell more online, launching and revamping e-commerce sites for various labels.
Cartier owner Richemont last week said it would bid for full control of Farfetch’s larger rival, luxury retailer Yoox Net-A-Porter , as it tries to do more on the web. Unlike Yoox, Farfetch does not stock inventory.
LISTING ON THE CARDS?
According to the latest available UK filings, Farfetch revenues increased by 74 percent in 2016 to 151.3 million pounds ($215 million), while net losses widened, to 34 million pounds.
About a third of sales are generated in Asia Pacific, another third in the United States and Latin America and the remainder in Europe and elsewhere, Neves said.
Farfetch said on Thursday it was teaming up with Dubai-based Chalhoub – a distributor for brands like LVMH-owned Christian Dior or Louis Vuitton in the Middle East – as it expands with an Arabic language website and sources more from local labels.
“There was one market where we were not yet fully localized, … which is the Middle East,” Neves said.
Neves did not disclose financial details of the venture, or how much Farfetch was investing in technology. He declined to comment on when the firm would turn a profit or potentially float.
Investment banks have recently been pitching to work on a possible U.S. listing, two sources familiar with the matter told Reuters this week.
A fundraising round in 2016 valued the firm at around $1.5 billion. China’s second-biggest e-commerce site, JD.com, has since invested in and partnered with Farfetch.
Farfetch doubled its pool of engineers to just under 1,000 between 2016 and 2017 – out of a total staff of 2,000 – and expects that figure to reach around 1,600 this year, with some 90 engineers working on the “store of the future”, up from 60 now, Neves said.
($1 = 0.7050 pounds)
(Additional reporting by Dasha Afanasieva; editing by Alexander Smith)