Showroomprivé issues profit warning

European online fashion retailer, Showroomprivé has announced that financial performance in the first half of the this fiscal year was not on the expected lines compared to the “Performance 2018-2020” plan anticipations, so the company will not able to reach its objective of a profitability in line with historical levels in 2019. Showroomprivé expects to post a first half EBITDA loss of 12-15 million euros.

The company said in a statement that this change in first half performance was mainly due to a persistently sluggish market throughout the period, which curtailed net revenue growth with 2.3 percent decline in Q1; a disappointing contribution from SRP Média; logistics cost overruns, the drop-shipping policy making an inevitable knock-on effect on costs during the ramp-up phase; the negative contribution from the exhaustion of residual stocks excluding Internet; a punctual impairment on residual stocks in the order of 10 million euros. The company added that SRP will also recognise non-recurring expenses for the period, particularly related to reduction in workforce of around 10 percent from January 1, 2019 to date and the discontinuation of a project that has ceased to be of strategic value.

The company further said that the group will start the second half of the year on sound and solid basis and expects to see a recovery compared to the first half, with the objective to return to profitability in the second half of the year.