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