Global Fashion Group (GFG), a leading online fashion and lifestyle retailer, has reported a challenging second quarter for fiscal 2024 (Q2 FY24), with a net merchandise value (NMV) of €285 million (approximately $314.2 million), marking a 12.3 per cent year-on-year (YoY) decline. This decrease was primarily driven by a 16.9 per cent drop in orders and a 16.7 per cent reduction in active customers, reflecting ongoing subdued demand across its markets.
Global Fashion Group (GFG) reported a 12.3 per cent YoY decline in Q2 FY24 net merchandise value to €285 million (approximately $314.2 million), driven by a 16.9 per cent drop in orders and 16.7 per cent reduction in active customers.
Despite the decline, average order value rose by 5.5 per cent YoY.
GFG improved gross margin to 45 per cent.
However, the rates of decline have moderated compared to recent quarters, with positive trends in customer reactivation and churn rate helping to offset some of the downward pressure from reduced traffic levels. Notably, the average order value (AOV) increased by 5.5 per cent YoY, partially mitigating the impact of lower volumes on NMV, the company said in a press release.
Regionally, GFG experienced varied performance. In Latin America (LATAM), NMV declined by 11.1 per cent YoY due to volatile trading conditions, including extreme weather events that affected seasonal demand. Southeast Asia (SEA) saw a sharper 20.4 per cent YoY decline in NMV, impacted by timing shifts for key holiday sales events and temporary regulatory changes. In Australia and New Zealand (ANZ), NMV fell by 8.4 per cent YoY. Despite these declines, the rate of NMV contraction in LATAM and ANZ showed improvement compared to the first quarter.
GFG achieved a gross margin of 45 per cent, representing a 3.5 percentage point increase YoY, with improvements across all regions. The adjusted EBITDA margin also improved significantly, gaining 6 percentage points YoY to reach minus 2.1 per cent.
In terms of inventory management, GFG maintained a prudent approach, successfully reducing inventory levels by 18 per cent YoY on a constant currency basis.
Fibre2Fashion News Desk (DP)