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Global Fashion Group's Q2 net revenues rise by 21.1 percent

By Prachi Singh

7 Sept 2018


Global Fashion Group (GFG) has said that that second quarter group net revenue was 297.8 million euros (346.5 million dollars), representing constant currency growth of 21.1 percent or 5.6 percent growth in absolute euro terms. NMV, which includes marketplace sales, the company added, was 314.1 million euros (365.5 million dollars), growing 23.5 percent on a constant currency basis.

During the quarter, adjusted EBITDA margin improved to 2.3 percent of net revenue, an improvement of 2 percentage points from the equivalent period last year. GFG added that gross profit margin at 42.9 percent improved slightly on that seen in Q217 with declines at Dafiti, Zalora & The Iconic being offset by improvements by Lamoda. In August, the company closed a revolving credit facility of 70 million euros (81.4 million dollars) from international banks to help support future growth investments into the business.

Highlights of GFG’s regional businesses during Q2

Lamoda’s net revenue during the quarter, was 94.5 million euros (109.9 million dollars) and delivered constant currency growth of 8.9 percent, an improvement from the 1.5 percent growth in Q1 this year, which the company said, was driven by the delayed uptake of the spring summer 18 collection, due to cold weather at the end of Q1.

The year on year depreciation of the ruble significantly impacted euro growth, resulting in a year on year net revenue decline of 6.7 percent. NMV grew to 97.3 million euros (113 million dollars), supported by positive marketplace performance, with a key focus to onboard more footwear and clothing suppliers, and delivered a constant currency growth of 14.9 percent. During the quarter, Lamoda’s gross profit margin improved by 6.3 percentage points to 49.7 percent.

Net revenue for Dafiti was 90.9 million euros (105.7 million dollars), growing 19.8 percent year on year on a constant currency basis, while NMV grew to 96.1 million euros (111.8 million dollars) in the quarter, a 16.7 percent uplift year on year. Continued depreciation of Brazilian real, the company added, resulted in absolute euro net revenue and NMV declining year on year by 1.4 percent and 3.3 percent, respectively. Gross profit margin declined by 1.4 percentage points in the quarter to 43.9 percent.

Zalora & The Iconic delivered net revenue of 110.2 million euros (128 million dollars), a 36.2 percent growth from last year on a constant currency basis and NMV of 120.8 million euros (140.5 million dollars), grew by 39 percent, again on a constant currency basis. Gross profit margin declined by 4.3 percentage points to 36.2 percent, driven by discounting at Zalora to clear old season stock.