BERLIN, Germany — Global Fashion Group (GFG), the online fashion retailer focused on emerging markets, said it is working hard to reduce its losses as it reported second-quarter sales rose a currency-adjusted 16.5 percent.
Shares in GFG, which runs fashion websites in Russia, Latin America and south-east Asia and which listed on the Frankfurt stock exchange last month, rose 4 percent.
GFG said it was making progress towards break-even on its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA), after its loss ticked up to €3.2 million ($3.55 million) in the second quarter.
"We are well on track," Co-Chief Executive Christoph Barchewitz told journalists, noting that the company had already reached profitability in Latin America and Australia in 2018, but it would take more time in south-east Asia.
Revenue came in at €343 million, while net merchandise value — the value of products ordered on the GFG marketplace — rose 22.7 percent on a constant currency basis to €449 million.
GFG, set up by Sweden's Kinnevik and Germany's Rocket Internet, trimmed its forecast for 2019 capital expenditure to €80 million from a previous €90 million to €95 million as it shifted some spending on a new warehouse in Brazil to 2020.
Barchewitz said he was not too concerned about a 2.2 percent fall in average order value to €50.50, saying it was more important to focus on order frequency, which was up 8.8 percent.
"There is certainly a tradeoff between frequency and average order value," he said, but added: "The economic model is working at these order values."
Europe's biggest online fashion site Zalando, on which GFG was modelled, has also seen a fall in average order value as customers shop more frequently from their smartphones, but buy less each time, denting its profitability.
By Emma Thomasson; editor: Michelle Martin.