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GFG - Global Fashion SA News Story

€6.25 0.4  7.4%

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Consumer Cyclicals
Mid Cap
Market Cap £930.5m
Enterprise Value £773.1m
Revenue £1.22bn
Position in Universe 366th / 1039

Global Fashion Group says it is making progress towards profit

Wed 21st August, 2019 8:45am
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:
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