Growth in Sales and Profit Milestone for Global Fashion Group

Global Fashion Group, the parent company of well-known fashion brands including Dafiti, Lamoda, Zalora, and The Iconic, has reported impressive results for the fourth quarter. The company experienced a significant increase in sales and reached an important profit milestone. Net merchandise value (NMV) rose by 28.9% at constant currency, totaling €594.5 million. It is worth noting that 61% of the revenue was generated through the company’s mobile apps. Furthermore, Marketplace NMV witnessed tremendous growth of 89% and achieved a 32% participation, up from 22% in the previous year.

Although there was a slight decline of 0.5% in actual revenue, when measured in constant currency, it saw a noteworthy increase of 19%, reaching €415.6 million. The gross margin also improved, rising from 40.4% to 44%. Active customer growth reached 24.6%, and the NMV per active customer increased by 0.9% to €120.30. Although there was an EBIT loss of €6 million, it was a significant improvement compared to the previous year’s loss of €31.6 million. Likewise, the net loss improved to €16.9 million, compared to the prior Q4’s deficit of €51.2 million. The most notable achievement was the positive adjusted EBITDA, which reached €19.3 million, as opposed to the previous year’s €0.7 million.

The company’s full-year results showcased a consistent growth trend, with NMV increasing by 25.7% to €1.958 billion. This year also marked the first time the company achieved a positive adjusted EBITDA of €16.4 million, with a margin of 1.2%. The SEA, CIS, and LATAM regions experienced NMV growth rates exceeding 30%, accompanied by significant improvements in gross margin. Additionally, the ANZ region recovered well, with Q4 NMV rising by 18.2%, thanks to improved inventory levels and increased sales during Black Friday and December.

Q4 recorded an impressive number of orders, reaching 13.3 million, a 28.8% increase compared to the previous year. The average order value also exhibited a slight improvement. Customer frequency stood at 2.6 orders per year, indicating a growing customer base and increased loyalty.

Co-CEOs Christoph Barchewitz and Patrick Schmidt expressed their satisfaction with the company’s positive adjusted EBITDA for the year, considering it a major milestone. They attributed the company’s success to its leading position as the only online fashion and lifestyle-focused platform operating at scale in its market. The increase in active customers also played a crucial role in driving performance. The company’s long-term goal is to achieve a NMV business of €10 billion within the next seven-to-nine years.

Looking ahead, Global Fashion Group anticipates its growth momentum to continue in 2021. It expects NMV to surpass 25%, reaching approximately €2.3 billion to €2.4 billion, while projecting revenue to be around €1.5 billion. The company aims to modestly improve adjusted EBITDA compared to 2020, allowing flexibility to capitalize on the growth opportunities presented by increased online penetration. These forecasts take into account the impact of Covid-19 but assume no significant deterioration in the regions where GFG and its suppliers operate.

With their positive financial performance and ambitious plans for the future, Global Fashion Group is well-positioned for continued success in the fashion e-commerce market.

Useful links:
1. Global Fashion Group Official Website
2. Global Fashion Group Q4 Results Article