Global Fashion Group (GFG) has reported impressive sales growth in the third quarter, despite the lingering impact of the pandemic on the fashion industry. Operating in growth markets across Latin America, Asia, and Eastern Europe, GFG saw an 11% rise in order frequency, as well as double-digit growth in net merchandise value (NMV) and active customers. The company’s co-CEOs expressed confidence in the e-commerce market’s future prospects, especially in regions with over a billion potential consumers.

Financially, GFG achieved a Q3 revenue of €366.2 million, representing an 8.5% increase in constant currency. NMV also experienced significant growth, reaching €572.2 million, a 12.4% increase in constant currency. Gross profit rose to €167.6 million. However, the company reported a wider loss in EBIT, amounting to €29.5 million, compared to an €8.3 million loss in the same period last year. Adjusted EBITDA also showed a loss of €7.5 million, contrary to the €10.3 million profit reported the previous year.

Despite these challenges, GFG reaffirmed its guidance for the full year and expects NMV to grow by over 25%, aiming for a range of €2.3 billion to €2.4 billion. The company also anticipates generating €1.5 billion in revenue. Compared to the €16 million reported last year, GFG expects a modest improvement in adjusted EBITDA.

Analyzing the quarterly performance, GFG emphasized the growth on a two-year basis, with NMV seeing a significant 51% increase compared to just over 12% year-on-year. This growth was driven by increased orders and average order value, as loyal customers continued to spend more across GFG’s platforms. Order frequency saw an 11% increase, and NMV per active customer increased by 15%.

Performance varied across different regions, with Latin America facing challenges due to a strong comparative period and a weaker macroeconomic environment. However, the CIS region experienced a 31% growth in NMV, highlighting the success of GFG’s premium offerings and customer initiatives. Southeast Asia and Australia-New Zealand also demonstrated strong NMV growth at 16% and 29%, respectively, despite the impact of Covid restrictions.

GFG’s marketplace witnessed growth, with participation reaching 40% of NMV in Q3. This, coupled with stable retail margins, led to an increase in gross margin to 46%. The company expanded its product portfolio by incorporating new brands, both global and local. In Southeast Asia, GFG extended its partnership with H&M Group to include COS and Monki, and also introduced Gap Inc.’s Old Navy. Additionally, it exclusively launched the Australian brand PE Nation in the CIS region.

Overall, GFG’s solid performance in Q3 showcases its ability to navigate the challenges present in the fashion industry. Concentrating on growth markets and expanding its customer base, the company remains optimistic about the opportunities available in the e-commerce sector. Despite the ongoing recovery from the pandemic, GFG’s robust sales growth underscores its resilience and adaptability in a rapidly evolving market.

Useful links:
1. Global Fashion Group
2. GFG Newsroom