Tough times in Australia for MySale, H1 hit by Omicron, supply issues
Tough trading conditions in its core Australia market hit MySale in the six months to 31 December, the London-listed online fashion and lifestyle retailer has admitted.
The company’s problems were two-fold as it invested in more own-label items. There was subdued demand, driven by the speed of the spread of the Omicron variant in Australia, and delays in stock deliveries prior to Christmas, meaning inventory built up to a higher level than expected — A$6.1 million (€3.84m/£3.22m/US$4.38m) by the end of the Christmas period.
And with those trading headwinds continuing throughout January and February to date, the MySale board is now “considering a number of strategic financing options… to manage its working capital, including reducing the A$6.1m inventory balance”.
So how tough was H1? Total revenues declined 6% to A$59.7 million while underlying EBITDA fell to A$1 million from A$2.5 million recorded in H1 FY21, rocked by supply chain volatility in Q2, it noted.
On the upside, Gross Merchandise Value increased 36% to A$86.7 million, “reflecting progress in scaling the group's off-price marketplace platform”, gross profit inched A$0.8 million ahead to A$24.9 million and gross margins improved to 41.8% from 38.1% in the year-ago period.
So given its recent trading trends, MySale said it is taking a “cautious approach to its full-year outlook and will provide further detail in due course”.
CEO Kalman Polak added: "The new management team has continued to scale our marketplace platform, which is complemented by our own-stock channel. The group has worked hard to navigate recent headwinds in lower consumer demand driven by the impact of the Omicron variant and supply chain challenges.”
He added: “The group's increased inventory position is of a of high quality. Notwithstanding these challenges, we remain confident and are well positioned to capitalise on the long-term opportunity for the group.”
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