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Farfetch Reports Surging Revenue, Acquires's Luxury Platform for $50 Million

Farfetch said revenue jumped 55 percent in the fourth quarter from the same period last year and that losses narrowed. The marketplace's China platform will also become the entry point for's luxury customers.'s automated logistics and warehouse complex in Gu'an, China | Source: Getty Images
  • Zoe Suen

LONDON, United Kingdom — The battle lines for control of China's booming online luxury market just got clearer.

It was announced on Thursday that Farfetch will acquire Toplife from for $50 million. The deal effectively folds’s existing luxury platform, Toplife, into Farfetch’s Chinese operations. Going forward,’s 300 million users will have direct access to Farfetch’s marketplace, which encompasses over 1,000 luxury brands and boutiques. will also use Farfetch’s technology and logistics platforms to connect foreign brands to Chinese customers.

Farfetch released its fourth quarter earnings Thursday, posting fourth-quarter revenue of $195.5 million, up 54.6 percent from a year earlier, with the number of active customers rising 31 percent over that period. Adjusted earnings before interest, taxes, debt and amortisation narrowed from a $23 million loss in the fourth quarter of 2017 to a $14.6 million loss in the most recent quarter. Shares are up nearly 2 percent in after-hours trading. invested $397 million in Farfetch in 2017, and ties between the two companies have grown steadily over the last two years, with Farfetch using’s logistics network and consumer data to expand its presence in China. is one of the largest shareholders in Farfetch, which went public last year, and chief executive Richard Liu sits on the marketplace’s board.

The tie-up is designed to help both companies compete with larger rivals in the world’s fastest-growing, and soon to be largest, luxury market. is the second-largest Chinese online retailer, but market leader Alibaba has rapidly scaled up its luxury offerings, signing dozens of Western brands to its Tmall marketplace, which has a 56.5 percent share of China’s e-commerce sales, to’s 25.8 percent. Late last year, Alibaba also inked a joint venture with Yoox Net-a-Porter, the largest online luxury retailer globally by revenue.

Farfetch, which got its start connecting local boutiques that listed products on its marketplace to global consumers, also has a growing business providing its e-commerce platform to third-party retailers on a much larger scale. Earlier this week, the company said it had signed a deal with Harrods to serve as the UK department store’s exclusive global e-commerce partner.

In a press release, Farfetch founder, chief executive and co-chairman, José Neves, called the product "an unrivalled solution for luxury brands to succeed in the Chinese market," while's chief strategy officer Jon Liao described the collaboration as a "win-win," stressing its importance in "developing ['s] global fashion and luxury ecosystem.

Farfetch shares were down 1 percent at $26.04 in morning trading in New York.

Updated 09:26 GMT on March 1 2019:

According to a Form 6-K that Farfetch filed on February 28, chief executive Richard Liu resigned from the Farfetch board on February 27.'s chief strategy officer Jon Liao replaced him as the Chinese company's representative, effective immediately.

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