Global Fashion Group hails rising sales and key profit milestone

By

Sandra Halliday

Published
Mar 1, 2021

Global Fashion Group’s Q4 results on Monday showed the company continuing to grow its sales and reaching its first-ever positive adjusted EBITDA figure for the full year.

The owner of the Dafiti, Lamoda, Zalora and The Iconic brands said its net merchandise value (NMV) rose 28.9% at constant currency, or 7.4% reported to €594.5 million with 61% of that being generated via its apps. 

And Marketplace NMV grew by 89%, achieving 32% participation compared to 22% a year earlier. 

Actual revenue may have dipped 0.5% to €415.6 million in absolute terms, but on a constant currency basis, it was up 19%. The gross margin rose to 44% from 40.4% and its active customer growth was 24.6%. Also pleasing was the fact that NMV per active customer was up 0.9% to €120.30. 

The EBIT loss was €6 million, although this was much better than -€31.6 million a year ago. The net loss was €16.9 million, again an improvement on the prior Q4’s €51.2 million deficit. But importantly, adjusted EBITDA was positive to the tune of €19.3 million, also better than the tiny +€0.7 million of a year ago.

For the full year (at constant currency) NMV increased by 25.7% to €1.958 billion and as mentioned, it was also the first adjusted EBITDA positive year with €16.4 million, and a margin of 1.2%.

GFG said the SEA, CIS and LATAM regions all saw NMV growth of more than 30%, along with strong improvements in gross margin, driven by that active customer numbers surge. Growth in ANZ also continued to recover, with NMV up 18.2% in Q4, driven by improved inventory levels and its biggest ever day on Black Friday, along with strong December sales.

It saw had another record number of orders — 13.3 million in the quarter — up 28.8% year-on-year, with a marginal improvement in average order value. Customer frequency was 2.6 orders per year.

Co-CEOs Christoph Barchewitz and Patrick Schmidt said the positive adjusted EBITDA for the year was a “milestone and our continued like-for-like NMV growth is a testament to our leading position as the only online fashion and lifestyle-focused platform operating at scale in our markets, where we have continued to act as brands’ partner of choice. Performance this quarter was driven by a record increase in active customers, as e-commerce adoption continues to accelerate. We are well positioned for the next phase of growth and to deliver on our ambition towards becoming a €10 billion NMV business in the next seven-to-nine years.”

And in 2021, GFG expects to grow NMV by over 25%, delivering around €2.3 billion to €2.4 billion in NMV, and around €1.5 billion of revenue, all on a constant currency basis. It also expects adjusted EBITDA to improve modestly on 2020, “which allows flexibility to take the growth opportunity from greater online penetration in our markets”. However, these forecasts assume no significant deterioration in the Covid-19 impact across the regions GFG or its suppliers operate in.