Farfetch (NYSE:FTCH) reported Q1 results, posting an almost +90% at constant currency basis in revenue, but keeping loss in the range of 77M USD: The doubling in revenue was not translated into profit. These elements confirm the RE-Analytics data on promotion and discounting (Raw Price Stream Dataset, available on Bloomberg Enterprise Access Point). During COVID-19 crisis our alternative dataset on online luxury goods product pricing and promotions showed an unprecedented growth of promotional activity for all digital retailers and marketplaces (Farfetch in particular).
As discussed during the Alliance Bernstein webinar, this behavior poses a threat to direct-to-consumer platforms: Platforms like Farfetch tend to divert consumers from brand official websites to their own platform at the cost of heavy price slashing activities. This practice was criticized by investors in late 2019 as it poses questions on the profitability of the model.