- Prachi Singh |
Global Fashion Group (GFG) has announced that for the first six months of 2016, net revenue grew 47.5 percent on a constant currency basis to 456 million euros (512 million dollars). Net Merchandise Value (NMV), which includes marketplace sales, increased by 53.2 percent on a constant currency basis to 465 million euros (523 million dollars). Adjusting for the inclusion of the acquired Kanui and Tricae businesses in Brazil and the disposal of several smaller markets, net revenue and NMV grew 36.6 percent and 41.3 percent respectively.
The gross margin increased to 42.2 percent and the adjusted EBITDA margin improved from 33.4 percent in H1 2015 to 14.8 percent in H1 2016. The company sold Jabong, its Indian business to Flipkart for 70 million dollars in cash in August. Additionally, GFG’s South-East-Asian business Zalora sold its operations in Thailand and Vietnam in April to retailer Central Group for an undisclosed amount.
Financial review of the businesses under GFG
During the period, GFG continued the successful roll-out of marketplace across key markets to complement the inventory-led model. Lamoda witnessed continued net revenue and NMV growth of 41.1percent and 43 percent respectively on a constant currency basis despite challenging macro and retail environment. Following progress on path-to-profit initiatives across fulfilment, marketing and overhead resulted in an improvement of 10.1 percentage points of Adjusted EBITDA margin to 6.1 percent.
Dafiti posted net revenue and NMV growth of 61.3 percent and 72.3 percent respectively. Adjusted EBITDA margin improved by 27.4pp to 9.6 percent, driven by a gross margin expansion, marketing cost reductions and G&A expense optimisation.
Namishi net revenue and NMV grew 51 percent and Zalora and The Iconic net revenue and NMV increased 38.9 percent and 47.2 percent, respectively. Gross margin improved 5.5 percentage points due to improved intake margins, sell-through and growth of the marketplace model and adjusted EBITDA margin improved by 20.7 percentage points.