Australian flash Sale site MySale plans to use its “substantial cash resources” to buy some of the high levels of the UK’s autumn 14 stock left following the unseasonal warm weather at the end of last year, at discounted prices.
A key part of MySale’s model is taking end-of-season stock from UK and European brands to sell in Australia and New Zealand, due to the northern and southern hemisphere seasons running opposite to each other.
Usually around 90% of the stock is taken on consignment and 10% own-bought, but the company is looking to increase its own-buy to 15%, which it expects will have a positive impact on gross margin and shipping margin, as stock will be bulk-shipped to the Australian distribution centre in Sydney.
It comes as MySale reported revenues increased 8% to A$123.3m (£62.6m) for the six months to December 31, but it made an EBITDA loss of A$11.4m (£5.7m). It expects EBITDA to break even for the second half.
During the half year-period, the company relaunched luxury Sales site Cocosa in the UK and closed the underperforming US and South Korean MySale sites to focus on its key markets of Australia and New Zealand, Southeast Asia and the UK.
Chief executive Carl Jackson said: “Six months into our trading in the UK, we are exactly where we want to be. We see real optimism with Cocosa with good customer metrics, as there is a lot of heritage with that brand. MySale is trading where we would want it to be at this stage.”
UK sales totalled A$1.8m (£900,000) in the six months, while gross profit margin was “in line with expectations” at 20%. Jackson declined to give a breakdown of sales for Cocosa and MySale.
The board is also focused on turning its close relationships with Arcadia and Sports Direct, which both own a stake in the company and use the platform to sell to customers in markets outside of the UK, into increased revenue.
In December, the company’s share price slumped by 48.6% to 89p following a profit warning, with Arcadia owner Sir Philip Green losing almost £30m in value from his holding and Sports Direct owner Mike Ashley losing £6m.
But Jackson said: “Both Sir Philip Green and Mike Ashley are absolutely on board and incredibly supportive of the business.”
Sports Direct is to open stores and venture into etailing in Australia and New Zealand in a joint venture with MySale subsidiary OzSale.com.au.
“We have made good progress with the Sports Direct partnership and the dispatch integration is now complete,” he added. “In the last few weeks we have had very large drops into our distribution centres to launch to the Australia and New Zealand sports apparel market.”
The company said this operating template can also be offered to other UK retailers.
Arcadia has a merchandising agreement to supply MySale with excess stock for its flash sales. “With Arcadia, we ran a number of successful campaigns with Topshop and BHS outside of the UK,” Jackson explained.
He did not rule out further acquisitions in future “as we have a strong balance sheet with a lot of cash”, but said it was “not the top priority at the moment”.