Jose Neves: Yes, that was the decision. We — in face of the current macro environment and in fact, we started this set of decisive actions in 2022, you will remember in 2022, we’ve done headcount reductions. We’ve also reorganized the business, redesigned our organization, we strengthened our leadership team with several new executive additions to the team. And this year, we are doubling down on that new paradigm of prioritizing profitability and prioritizing cash flow generation as a non-negotiable. Beauty was a decision based on that new approach. We have been incredibly successful at category expansion. I just want to remind everyone who’s listening to this call. We have the largest menswear luxury destination in the world.
We are the largest kids luxury destination in the world, a category, we started from zero just a few years ago. We have a very healthy and profitable and fast-growing, have luxury category. We’ve recently announced sales of watches about $2.5 million, fine jewelry sets for $1 million. So we’re really servicing the high jewelry category in an incredible way. We’re adding to that with Richemont partnership with Cartier, Vantiv and all the watch brands joining our marketplace, obviously, as soon as the deal completes and we do the necessary integrations. So we have to make strategic decisions here. And when we have categories which are paying off and categories such as high luxury with incredibly high AUVs and higher profitability, versus investing the same dollars in beauty, which has a lower — obviously lower AUV and more challenging profitability and unit economics.
It was a decision that we’ve made. It was, in my view, absolutely the right decision to discontinue the beauty category on the marketplace to focus on all the other categories, which we have launched and where we’re seeing a lot of success.
Operator: Our next question comes from Stephen Ju at Credit Suisse. Please unmute and ask your question.
Stephen Ju: Great. Thank you. So Jose, I guess, more of a very big picture question. So I think one of the bullet points in the release was highlighting your supply growth of 40% year-over-year, but your active customers grew, I believe, 7% and order growth was around a similar amount. So maybe these latter two metrics are a horrible proxy for demand growth, but this also, at the same time, makes us worry about what might be rising in balance between supply and demand on your marketplace, particularly as you’ve turned off demand gen (ph) and spend in the U.S. So can you talk about whether you feel like Farfetch is still a materially better channel for brands as well as retailers to market the merchandise or is this demand something that we should be thinking about and worry about for the future? Thanks.
Jose Neves: Thank you. It’s a really good question and allows me to talk about the strengths of the Farfetch business model. Farfetch is unique in the luxury industry. When you don’t — you really don’t see the luxury industry adopting other marketplaces such as Amazon or Etsy or eBay or other platform, so this is an industry that remains and penetrated by the giants in terms of the marketplace space. And two, the multi-brand online luxury destinations that compete for eyeballs with us, they’re all retailers, are 80%, 90% retailers with a very small component of e-concessions, we’re exactly the opposite. We’re around 80%, 85% 3P. So this unique marketplace drop-shipping model, which is unique in this industry. This is what brands want.
And brands have said it time and time again, they are divesting from wholesale, especially online wholesale and wanting to conduct sales direct-to-consumer in curated, elevated multi-brand platforms such as Farfetch. And this is what’s driving the 40%. And also because of the drop shipping model, we are connecting to the inventory pipeline, if you want, of the brands for example, with carrying, we’ve launched a revolutionary integration, where we are now integrated with the carrying distribution centers, which power brand.com as well as either direct channels in a fully automated way. We already have dozens of integrations with the carrying brands across the group in various ways. This integration is driving part of that 40% growth, for example, but it’s really across our top brands.
