Coupang has taken Farfetch on — now it just has to dig itself out.
The luxury e-commerce platform, which melted down last year and was scooped up by Coupang for $500 million in rescue financing, is still losing money.
But Farfetch is also still growing closer to becoming the self-sustaining business that it was long promised to be.
For the first quarter ended March 31, Coupang said Farfetch added $288 million in revenues to its business, but generated net losses of $93 million. Adjusted losses before interest, taxes, depreciation and amortization tallied $31 million.
Overall Coupang’s revenues rose 23 percent in the quarter to $7.1 billion, although net income fell to $5 million from $86 million a year earlier as a result of the Farfetch deal.
Bom Kim, chief executive officer of Coupang, told analysts on a conference call on Tuesday, “Our journey at Farfetch is just beginning and the team is focused on generating close to positive adjusted EBITDA on a run rate basis by the end of the calendar year.”
Farfetch was once seen as the luxury e-commerce platform that was most likely to succeed and regularly signed on big partners like Neiman Marcus and offered an array of services, both online and through a high-tech store concept. Along the way it accumulated a number of businesses, including New Guards Group, Stadium Goods and Violet Grey.
Now Coupang is reshaping the business — as it works along a number of fronts.
Kim said Coupang had a “strong start” to 2024 and offered “five takeaways” that made clear just how busy the company is.
“First, we continue to deliver results because we focus on what matters most: customer experience and operational excellence. Second, we’re still single-digit share of a massive retail opportunity in Korea and an even smaller share of Taiwan’s. Third, newer services like Rocket Fresh and Fulfillment & Logistics by Coupang, or FLC, are gaining momentum.…Fourth, our developing offerings are making significant strides.…Finally, we continue to invest in infrastructure.”
All of this is in the company’s relentless pursuit of “new moments of ‘wow’ for customers.”
