Subdued consumer demand impacts Global Fashion Group's results

In the fourth quarter, Global Fashion Group (GFG) delivered a net merchandise value (NMV) of 369 million euros, a 14 percent decrease due to the continued subdued consumer demand environment. Revenue decreased 16.8 percent to 243.1 million euros.

Full year NMV was down 14.2 percent to 1,279.3 million euros and revenue was down 18 percent to 838 million euros.

Commenting on the trading update, Christoph Barchewitz, CEO of GFG, said:“We anticipated a challenging market and took action to navigate it by prioritising growing our marketplace and platform services, reducing costs and advancing our strategic initiatives. As a result, we achieved adjusted EBITDA breakeven in Q4, and maintained a healthy gross margin.”

In LATAM, the company added, NMV declined 12.4 percent where the focus remained on strengthening the customer proposition in an inflationary and competitive market. SEA’s gross margin increased 1.1ppt to 43.3 percent, while NMV declined 18 percent. ANZ also improved gross margin by 1.5ppt to 46.4 percentbut the region reported a 12.6% decline in NMV.

GFG’s focus on the expansion of its platform business and implementation of cost-saving actions culminated in year-on-year improvements for both gross margin and adjusted EBITDA. The group’s gross margin increased 0.9ppt to 43.6 percent, while adjusted EBITDA margin of 0.2 percent, improved 2.1ppt.

In 2024, GFG expects to deliver a 5-15 percent decrease in NMV on a constant currency basis, implying 1.1 to 1.2 billion euros in NMV. Adjusted EBITDA is expected to be negative 25 to 45 million euros reflecting ongoing market challenges which have been observed in similar topline trends in the first two months of 2024.