Global Fashion Group (GFG), the leading online fashion and lifestyle destination in growth markets, expects Q2 to be its second Adjusted EBITDA-profitable and first cash flow-positive quarter, as a result of strong customer demand recovery since the end of April, and the company’s strategic response to the COVID-19 pandemic.
Preliminary results indicate the following expected outcomes for GFG’s performance in Q2:
- Net Merchandise Value (NMV) growth on a constant currency basis of above 20% for the quarter despite the negative COVID-19 impact in April, driven by more than two million new customers.
- Adjusted EBITDA profitability, enabled by strong gross margin and significantly better marketing efficiency.
- Improved Marketplace share of more than 30% (Q2 19: 19%) and around 90% Marketplace NMV growth as a result of category mix shift and increased Marketplace SKU share.
- Profitability, alongside disciplined working capital management and capital expenditure, resulted in strong cash generation and a pro-forma cash balance* at 30 June of around €260m, up €50m from 31 March.
Christoph Barchewitz and Patrick Schmidt, Co-CEOs of GFG said: “We continue to put the safety of our people first and are humbled by this strong financial performance, which is a direct result of the agility and adaptability of the GFG teams around the world. Over the last few months customer acquisition, Marketplace share growth and brand relationships have been accelerated. We have continued to execute against our strategic priorities with a focus on capturing the significant fashion and lifestyle ecommerce opportunity in our markets.”
GFG experienced a strong recovery in sales from late April, with Order Intake** up over 30% since the start of May compared to the same period last year. This was driven by strong performances in CIS and LATAM, while APAC saw more moderate growth as a result of soft trading in Australia.