This news comes just over a year after Farfetch launched its beauty business when it acquired high-end beauty retailer Violet Grey in January 2022. In April 2022, Farfetch launched its online beauty shop with a selection of prestige brands, including Augistinus Bader, Dr. Barbara Sturm and Charlotte Tilbury Beauty.
According to Market Watch, shares of Farfetch Ltd. dropped more than 30% in the extended session Thursday after the company reported lower-than-expected sales for its second quarter. Farfetch posted a loss of $281 million, or 68 cents a share, in the quarter, compared with a loss of $68 million, or 50 cents a share, in the year-ago period. Meanwhile, revenue fell to $572 million, from $579 million a year ago.
The decline of Farfetch highlights how challenging it can be to navigate the beauty market—even for established fashion players. U.S. prestige beauty industry sales revenue grew 15% year over year in 2022, reaching $27.1 billion, according to The NPD Group (now Circana). In fact, prestige beauty was the fastest-growing industry segment, across more than $4 trillion in U.S. general merchandise consumer spending tracked by NPD and IRI. But tapping into that market is easier said than done.
Farfetch has yet to turn a profit in its history as a publicly-traded company.
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