Global Fashion Group losses halve as sales leap
Rocket Internet published its Q2 results for Global Fashion Group (GFG) Friday so just how did the giant online fashion destination for growth markets fare?
It looks to be doing well, apart from the fact that it’s still lossmaking. But its losses have dwindled while sales are on the rise, even excluding the Namshi business (in which Emaar Malls has acquired a controlling stake).
GFG said that in Q2, continued net revenue saw growth across all regions. Net revenue for the quarter was up 25.6% to €281.9 million, or 16% currency-neutral. Meanwhile, NMV, which includes Marketplace sales, surged 29.3% to €292.1 million (18.8% currency-neutral).
Of course, as mentioned, the company is still making a loss, but that loss on an adjusted Ebitda basis was almost halved from €23.1 million to €12.1 million.
That reduction in red ink came as the company reported Zalora and The Iconic net revenue rising 22.4% (or a slightly higher 22.5% currency-neutral) while the gross profit margin increased by 3.6 percentage points to 40.5%. Zalora saw the successful launch of new brands in the quarter, including Adidas, Hollister & Co and Hugo Boss, while The Iconic on-boarded 28 new retail brands and over 60 new marketplace brands.
The company also said that its Lamoda saw net revenue growth of 39.3%, which translated to 19.1% currency-neutral, despite continued intense competition and the unseasonably cold weather impacting the launch of the SS17 range. During the quarter, Lamoda rolled out more customer pick up points, and became the official Russian e-commerce licensee for FIFA for the 2017 Confederation Cup and the 2018 World Cup to be held in Russia.
Meanwhile Dafiti delivered revenue growth of 17.3% and on a currency-neutral basis, it was up 7.7% with further strong marketplace growth in all countries, driven by the continued focus on assortment and its pricing strategy.
The partnership in the Middle East with Emaar Malls acquiring 51% of Namshi was successfully completed in August for $151 million in cash. And the partnership in the Philippines with Ayala acquiring a 49% stake in Zalora Philippines through a primary investment was also successfully completed last month.
The company said it is is looking forward to the strategic and operational benefits both of these partnerships will bring to the businesses in these two regions.
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