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Global Fashion Group breaks even

Revenue at international ecommerce company Global Fashion Group jumped 17.1% to €417.7m (£364m) for the three months to 31 December 2019, fuelled by a record Black Friday and Cyber Week. 

The group, which owns websites including The Iconic, Zalora and Dafiti, reported a 40.4% year-on-year rise in gross profit to €168.9m (£147m) for the same period. It broke even for the first time, delivering adjusted EBITDA of €0.7m (£0.61m) – up 0.2% year on year. 

Net merchandise value (NMV) increased by 23% to €554m (£482m), and the number of orders rose by 20% to 10.3 million during the period. Active customer numbers rose 17% to 13.1 million. 

Co-CEO Christoph Barchewitz told Drapers: “Quarter four is definitely our strongest quarter from a sales point of view, and that then has a trickle down effect to profitability and was a big driver to our first-ever profitable quarter.

“It’s been really down to the investment into the local customer experience. We have local buying and design teams in all almost all of our markets. We have 17 offices and 10 fulfilment centres, so believe and invest into a localised customer proposition starting from local design and buying and all the way to fulfilment and we believe that really fuelled our results.”

In 2019, Global Fashion Group invested €72m (£63m) of capital investment into property, including its new Brazilian fulfilment centre, and in-house technology. 

“We’re excited for it to go live and there has been a lot of investment into automation and faster fulfillment,” said co-CEO Patrick Schmidt. “We’re also opening new fulfilment centres in Jakarta and Manilla this year so the investment into the operational infrastructure is really quite significant.”

It also introduced its first resale model on the Zalora platform. The Iconic launched sustainability edit ”Considered” during the year, and its first sustainable own brand, Aere. 

Schmidt said: “Sustainability is an important priority for us. We’ve started to roll out different tests of how we can fulfil our vision of becoming a more sustainable retailer and one of those tests is the resale model in Singapore.

“We want to learn how our customers are reacting to that and if the test is positive, we’d like to roll it out in other markets because ultimately the best way to become a sustainable retailer is to extend the life of our products.”

The pair said that early indications have been positive. 

Building on GFG’s progress the business has committed to achieving break-even for the group “no later than 2021”. 

 

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