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Online luxury marketplace Farfetch preps for an IPO as the global luxury ecommerce sector continues to shine.

London-based Farfetch unveiled plans for an IPO on the New York Stock Exchange in August, the latest sign of robust growth in the high-end ecommerce sector – a bright spot in the otherwise troubled retail industry. According to Bain & Company, online luxury sales rose 24% in 2017. The firm estimates that the online luxury market will grow by 6% to 8% this year and reach $446 billion by 2025.

Valuations are sky-high, and investors are eager to jump in. In September of last year, private equity firm Apax Partners took a majority stake in British luxury ecommerce group Matchesfashion.com for about $1 billion. Also in 2017, New York-based high fashion ecommerce site Moda Operandi announced that it had secured $165 million in its latest round of funding. This highly lucrative slice of the retail industry is still an open playing field with relatively few players, so there’s also potential for upstarts to emerge.

Farfetch, founded by Portuguese entrepreneur José Neves in 2007, is an online platform for hundreds of luxury boutiques and brands, catering to money-rich but time-poor shoppers in 190 countries. It now has nearly a billion active users and is one of a handful of tech companies in Europe with a valuation topping $1 billion. Last year Chinese ecommerce giant JD.com invested $397 million, giving Farfatch a boost in the world’s third-largest luxury market. JD.com will maintain its stake after the listing.

“What makes us different is that everyone else is operating on a retail model, but we are a platform, not a shop, an enabler not a competitor, and are reaping all the advantages that such a position entails,” Neves said. “We believe we are the only global luxury platform at scale.”

Farfetch and its main rival, Milan-based luxury ecommerce giant Yoox Net-a-Porter, have been rapidly expanding their territories and rolling out new services – both to outdo one another, and to open up new revenue streams to fund their ambitious growth objectives. In April, for example, Farfetch debuted 90-minute Gucci delivery in 10 cities. This was followed by the launch of its new “Store of the Future” technology suite. Yoox Net-a-Porter was taken private by a Swiss luxury goods group this year, the New York Times reports.

Farfetch’s sales grew 59% last year, to $386 million, but the company has yet to turn a profit. This could be seen as growing pains: The company’s losses grew to $68 million in the first half of 2018, while its investments and costs increased. In the filing to announce its public offering, Farfetch attributed the losses to the costs of entering new markets, adding new brands and establishing partnerships. No date has been set publicly, but the IPO is expected to happen in 2018.

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