Alternative Data on Farfetch (NYSE:FTCH) showed that, during COVID19 pandemic Farfetch adopted an extremely aggressive price reduction strategy: In April products on promotion were more than 60%. April is typically a full-price month, where new collections capitalize most of their marginality. A lost month for margins, but growing volumes (see WWD article). The dependancy on promotion was highlighted in Q1 as well.

The effect has been to trigger a price-war, capture consumers from other platform, growing volume of GMV, but sinking marginality.

Dataset: Raw Price Stream

Provider: RE-Analytics, available on Bloomberg EAP.

Farfetch alternative data show a drop in marginality of the business model
Farfetch alternative data show a drop in marginality of the business model