Showroomprivé ceases operations in UK, Germany, Poland
today Jan 21, 2019
The operation was one of the four key points in French event sales group Showroomprivé’s strategy to improve profitability, after the group completed a share capital increase worth €39.5 million last December.
The four points included product margin improvement, the optimisation of the group’s cost structure, an €11 million investment in an automated warehouse and finally the “rationalisation of the group’s international footprint, prioritising the geographical areas where the group has the best commercial positioning.”
At the same time, Showroomprivé indicated that “it would also assess the opportunity of introducing measures aimed at reducing the losses deriving from internet business in non-strategic countries.”
Sources have now told FashionNetwork.com that the new strategy is being implemented, and that the UK, Germany and Poland no longer feature in ShowroomPrivé’s short-term plans. According to these sources, the staff working in these countries will be transferred where possible, or helped find other professional opportunities in the coming weeks.
Showroomprivé was launched in the UK in 2011, in Poland in 2013 and in Germany in 2014. Despite its best efforts, it never seemed to find the ideal formula to operate profitably in the latter country. Showroomprivé was listed on the stock exchange in 2015, and in 2017 it heralded the intention of reaching €1 billion in revenue at the end of the 2018-2020 period. The apparel inventory clearance specialist does however operate within a troubled sector and a highly competitive market. Its margins have gradually been eroded, and it is now striving to improve profitability.
For the time being, it is not withdrawing from its other countries and, besides the French domestic market, it will focus on Italy, Spain, Belgium and Portugal. In H1 2018, the group generated an online revenue of €307 million, of which nearly €54 million were produced outside France. At the time, EBITDA was €3.67 million in France, but the international business posted a €4.5 million loss. By concentrating on France, Belgium and southern Europe, Showroomprivé is therefore working on its most profitable regions. The share capital increase approved at the end of 2018 will also allow the group to take full control of the BeautéPrivé website.
In 2017, the group recorded a revenue of €655 million, of which €111 million were produced outside France.
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