A reduction in promotions and focus on acquiring quality brands have led flash Sales retailer MySale to return to profit, its CEO Carl Jackson said today.
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The Australian company reported an underlying EBITDA of A$5.5m (£3.2m) for the year to 30 June 2016 – above expectations for the year so far – bouncing back from a A$9.5 (£5.6m) EBITDA loss in 2015. Profits rose 21% on revenues up 7% from A$235.9m in 2014/15 to A$252.3m (£139.1m to £148.8m).
Jackson told Drapers that reducing promotional incentives and focusing on quality was key to the turnaround: “It’s around building the relationship with the brands, and getting the right gross margins and the right value propositions.
“We reduced the amount of promotional activity we do around shipping and incentives to acquire customers because, if there’s a fabulous brand on the website, it will resonate with the customer and they will engage.”
MySale’s investment in technology doubled to enable its ecommerce platform to operate in eight countries. Jackson said he expected to see the benefit of this investment over the next 12 months.
Jackson also expressed his confidence in the UK market, where revenues grew by 139% from A$4.2m (£2.5m) in 2014/15 to A$10m (£5.9m). Gross profits were up 133% to A$2.05m (£1.2m). This was largely driven by the ecommerce outlet Cocosa, which launched last year in the UK.
“There are some very good UK, European and international brands who are using us as a channel of distribution to clear their inventories, which resonates very well with the Cocosa customer,” Jackson told Drapers.
“We have now got the team in place locally and we’re very focused on our sourcing. The heart of the business is getting great brands at exceptional value. We’ve put all the building blocks in place and now it’s about accelerating the growth in terms of our investment in marketing.”
Jackson said a trial partnership with Sports Direct, which began four weeks ago, had been successful and will now be launched, enabling the group to sell its sportswear brands in Australia through MySale.
“It’s very expensive to buy sportswear in Australia and we have a good partnership that gives us a good opportunity to disrupt that market,” he said. “It will resonate very quickly with the Australian consumer.”
In the wake of Sir Philip Green’s involvement in the BHS collapse and the inquiry into Mike Ashley’s Sports Direct, both of whom are investors in MySale, Jackson also stressed that the company had experienced “no adverse impact whatsoever” from the negative press, describing both as “fantastically supportive”.