Global Fashion Group S.A., the online fashion and lifestyle destination, has delivered another profitable quarter with a strong set of results and substantial gross margin improvements.
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Christoph Barchewitz and Patrick Schmidt, Co-CEOs of GFG, said, “It has been another promising quarter for GFG despite the ongoing impact of the pandemic across most of our markets. As consumer spending continues to shift online, NMV grew 32 percent, Active Customers reached 17 million and we delivered 13 million orders. We have also seen a strong recovery in order frequency of 10 percent and a 60 percent growth in Marketplace. As e-commerce continues to grow at pace, the resilience of the GFG team and performance of our Marketplace business, continue to drive our strong results and we remain confident in achieving our long term targets.”
GFG reaffirms its FY2021 guidance and expects to grow NMV by over 25 percent, delivering c. US$2.6-2.8 billion in NMV, and around US$1.7 billion of revenue, all on a constant currency basis. GFG expects Adjusted EBITDA to improve modestly and Capex investment will be around €60 million in FY2021. GFG’s outlook remains impacted by the elevated uncertainty associated with both the first and second degree impacts of COVID-19 across its markets.
In Q2, GFG delivered NMV of US$712.7 million, up by 32.0 percent yoy. This was driven by new customer growth and loyal customers returning to the platform and spending more. GFG now has 17.0 million Active Customers, up 15.8 percent yoy, with two million new customers shopping across GFG’s platforms during Q2.
All of GFG’s regions continued to grow in Q2. Markets where COVID restrictions were lifted saw the strongest growth driven by the recovery in ‘going out’ categories. This was most evident in ANZ which saw NMV growth of 68 percent as a result of the post-pandemic recovery and soft trading last year.
Across all other GFG regions, ‘lockdown’ categories continued to overperform. NMV growth in SEA was a strong 33 percent despite COVID restrictions and in CIS NMV grew 24 percent – a good result following last year’s Q2 growth of 45 percent. LATAM grew 21 percent despite ongoing COVID-related disruption, heightened competition in the region and tougher comparables in the second half of the quarter. It performed exceptionally well in Q3 last year, growing 52 percent – nearly double its then Q2 rate.
Continued investment in ensuring a seamless and inspiring customer journey and the growth in GFG’s Marketplace supported the strong NMV performance across all markets. These strategies improved the Group’s average order value which alongside the improvement in order frequency, drove a +14.9 percent growth in NMV per Active Customer.
Continuing the Group’s focus on delivering an even broader assortment, in Q2 GFG launched new categories and strategic brand partnerships including Country Road Group and Massimo Dutti, as well as geographic expansions for brands such as Kate Spade and YvesSaintLaurent. This helped drive a 60 percent growth in Marketplace NMV yoy, with participation of 37.7 percent and saw categories such as Beauty grow by 68 percent.
The improvement to our retail margins and the growth of GFG’s Marketplace contributed to the 3.5pp increase in gross profit margin to 46 percent. As expected, the Group returned to pre pandemic levels of marketing investment, delivering a positive 2.9 percent Adjusted EBITDA margin for the quarter.
Continuing the Group’s sharp focus on sustainability, GFG achieved carbon neutrality across all of its operations which includes the use of 100 percent green energy across its 9 fulfillment centres and increasing the number of parcels delivered with zero emissions for the last mile.
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The Group also released its long term carbon mitigation strategy in Q2, marking a key milestone in the company’s journey to reduce its footprint and manage the transition to a lower carbon economy. Progress towards GFG’s 2021 People and Planet Positive targets remains on track, with the company’s Science Based Targets set to launch later this year. GFG is also proud to be rolling out our adaptive range design to meet the needs of people with disabilities.