Global Fashion Group revenue rises in Q1 but loss widens

Rocket Internet’s Global Fashion Group unit reported a buoyant Q1 on Friday as revenue and customer numbers rose strongly, although the company remains loss-making on an Ebitda basis.


Zalora/Global Fashion Group

The Ebitda loss widened a little to €32.2 million from €31.9 million a year ago and the margin was a negative 13.6%, better than the minus 13.9% of the prior year’s Q1. 

But the rest of the report contained mainly good news and the number of active customers rose over 12% to 10.1 million.

On the sales from it looked healthy too, despite currency issues affecting some of the reported figures.

The company said that its group net revenue for the quarter was up 17.6% on a constant currency pro forma basis to €236.9m, but translating into 3.6% growth in reported euro terms. Net Merchandise Value (NMV), which includes marketplace sales, grew 19.9% on a constant currency basis, which was an acceleration on the equivalent period last year. 

Clearly, that 3.6% sported rise meant that depreciation across all key currencies hurt top-line euro growth with the Brazilian Real, the Russian Ruble and the Australian Dollar begin particularly problematic.

However, the company said that continued operational efficiency gains had a positive impact, even though its investments in price at Dafiti, Zalora and The Iconic meant the gross profit margin declined by 1.0 percentage point year-on-year to 37%. This impact “was more than offset by path-to-profit initiatives and scale benefits,” it added.

GFG said that Lamoda’s net revenue was €81.3 million for the quarter and delivered a modest constant currency growth of 1.5%. NMV grew to €83.6 million, supported by strong marketplace performance, which meant constant currency growth of 4.7%.

During the quarter, Lamoda’s gross profit margin improved by 0.8 percentage points to 34.1%. Further developments were made at the start of the year “to enhance the customer experience, including 15 minute delivery slots and a fast-paced roll out of additional pick-up locations.”

Net revenue for Dafiti was €75.2 million, growing 24.3% year-on-year at constant currncies. NMV grew to €78.6 million, a 21.4% uplift boosted by strong marketplace performance as a result of quality improvements and strong growth in Colombia. However the gross profit margin fell by 1.1 percentage points to 40.8%, due to those investments in pricing.

During the period, Dafiti became the first fashion e-tailer in Latin America to offer payment via Apple Pay. 

Zalora and The Iconic delivered net revenue growth on a constant currency basis of 30.5% to €76.7 million and NMV up 37.2% to €84.7 million. The gross profit margin declined by 3.5 percentage points to 37.2%, on the back of “competitive promotional pricing and product mix effects.”

Following the successful launch of Zalora Now in Singapore, the express delivery service was rolled out to customers in Malaysia. Further key brands were launched across The Iconic during the quarter, including J Crew and Marc Jacobs.

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