Jul 29, 2022
Showroomprivé sales drop significantly in the first half of the year, but posts slight profit
Jul 29, 2022
Sales of the e-commerce clearance site Showroomprivé fell by more than 21% in the first half of 2022 to €305.4 million, but the website's owner, the SRP Group, announced Thursday that it remained in positive territory, reporting a slight profit of €1.6 million.
In the first half of 2021, the company had posted a net profit of €20.6 million. It had already pointed out in March 2022, when Showroomprivé published its annual results, that the uncertain geopolitical context could affect its business in the first half of the year, expecting a drop in revenue.
"We are operating in a deteriorating environment that confirms the trend observed at the end of last year, with disruptions in brands' production and supply chains and concerns about customers' purchasing power," the group's co-founder and CEO, David Dayan, told AFP, noting that the drop in sales was also due to "an unfavorable comparable base."
Gross merchandise volume, or GMV, also declined significantly (-18.2%) to €431.9 million. This indicator, which measures the activity of e-commerce sites, aggregates sales made on third-party online marketplaces, as well as "other services and other revenues".
"We were expecting a recovery in activity in the second half of 2022, but it looks like it will take longer to actually happen," added Dayan. He expressed confidence that Showroomprivé is "very well positioned for recovery, both in the medium and long term," mentioning in particular the group's growth drivers, "travel and ticketing, which are currently developing."
"The important thing is that our cost structure is resilient," he said.
"We do sense that the French are a little bit affected by inflation and that the pressure is a little stronger on prices, that our customers are asking for slightly higher discounts," he reported. According to him, this forces the company to be "very attentive" to costs, especially transportation costs.
The SRP Group had announced in April that it was taking a majority stake in The Bradery, a "fast-growing player in high-end event-driven retailing" targeting young female consumers. This €10.2 million acquisition was accompanied with the option to purchase the remaining 49% "by 2026."
The Bradery, which has about 400 partner brands, 200,000 regular shoppers and 300,000 followers on Instagram, is "almost at a financial break-even point," said Dayan in April.
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