ShowroomPrivé issues 2019 profit warning
today Jun 28, 2019
ShowroomPrivé has issued a profit warning. On the evening of June 26, the French event sales website announced it will not be able to reach the profit level forecast this year as part of its Performance 2018-2020 plan. ShowroomPrivé warned that EBIDTA in H1 will be negative, ranging between -€12 million and -€15 million. The group is however optimistic about H2, as its business is usually more buoyant in the second part of the year.
The group’s senior management explained that targets have been revised downwards owing to “the gap between the performance in H1” and the three-year plan’s forecast. Indeed, H1 was rather bleak for ShowroomPrivé, in the wake of a first quarter in which net revenue fell by 2.3%. Also, the boost to growth expected from SRP Media failed to materialise, in the absence of “campaigns by major advertisers.” ShowroomPrivé’s introduction of dropshipping and a series of glitches in returns handling are also said to have contributed to the situation.
However, this should not mean that the strategic linchpins of the Performance 2018-2020 plan are in question, said the group, ahead of its AGM on June 27. Showroomprivé’s goal is to return to profitability in the second half of the year, expecting to stage a recovery by energetically engaging its customer base of 9 million consumers, as well as by rationalising inventory and reining in logistics costs. The group’s H1 results will be published on July 25.
Last year, Showroomprivé manage to stem its losses, bringing them down to €4.4 million as opposed to €5.2 million a year earlier. Revenue instead grew by 2.6%, reaching €672.2 million. An event sales and stock clearance specialist positioned chiefly on the womenswear segment, ShowroomPrivé currently generates 85% of its site traffic and 68% of its revenue via mobile devices. The group was listed on the Euronext Paris stock exchange in October 2015.
The share price, which was already weak, lost further ground on June 27 after the profit warning, its value down nearly 33% to €1.14 per share.
Copyright © 2019 FashionNetwork.com All rights reserved.