Global Fashion Group says it is making progress towards profit
21/08/2019 08:45
BERLIN, Aug 21 (Reuters) - Global Fashion Group (GFG)
GFG.DE , the online fashion retailer focused on emerging
markets, said it is working hard to reduce its losses as it
reported second-quarter sales rose a currency-adjusted 16.5%.
Shares in GFG, which runs fashion websites in Russia, Latin
America and south-east Asia and which listed on the Frankfurt
stock exchange last month, rose 4%.
GFG said it was making progress towards break-even on its
adjusted earnings before interest, taxation, depreciation and
amortisation (EBITDA), after its loss ticked up to 3.2 million
euro ($3.55 million) in the second quarter.
"We are well on track," co-chief executive Christoph
Barchewitz told journalists, noting that the company had already
reached profitability in Latin America and Australia in 2018,
but it would take more time in south-east Asia.
Revenue came in at 343 million euros, while net merchandise
value - the value of products ordered on the GFG marketplace -
rose 22.7% on a constant currency basis to 449 million euros.
GFG, set up by Sweden's Kinnevik KINVb.ST and Germany's
Rocket Internet RKET.DE , trimmed its forecast for 2019 capital
expenditure to 80 million euros from a previous 90-95 million
euros as it shifted some spending on a new warehouse in Brazil
to 2020.
Barchewitz said he was not too concerned about a 2.2% fall
in average order value to 50.5 euros, saying it was more
important to focus on order frequency, which was up 8.8%.
"There is certainly a tradeoff between frequency and average
order value," he said, but added: "The economic model is working
at these order values."
Europe's biggest online fashion site Zalando ZALG.DE , on
which GFG was modelled, has also seen a fall in average order
value as customers shop more frequently from their smartphones,
but buy less each time, denting its profitability.
($1 = 0.9018 euros)
(Reporting by Emma Thomasson
Editing by Michelle Martin)
((+49 30 2888 5081; Reuters Messaging:
emma.thomasson.thomsonreuters.com@reuters.net))