Global Fashion Group Lifts Adjusted EBITDA as Sales Fall

Adjusted EBITDA rose to €3.4 million from €0.9 million a year earlier. Gross margin reached 47%, up from 46.1%. GFG kept 47 cents from each euro of revenue after the direct cost of goods sold, before paying operating expenses.

Keeping more from each sale helped support earnings, but adjusted EBITDA leaves out interest, taxes, depreciation, amortisation and other adjustments, so it does not show the final profit left for shareholders. Revenue was €156.7 million, nearly unchanged in reported euros but down 7.7% at constant currency.

Removing exchange-rate movements reveals a weaker sales picture than the headline euro figure suggests. Net merchandise value, a measure of merchandise sold through its platforms, fell 5.4% on the same basis to €243.4 million. Active customers declined 7.2%, while order frequency increased 1.8%.

Customers were buying slightly more often, but the smaller customer base remained a drag on merchandise sales. GFG is getting more repeat purchases from the customers it still has, but that has not been enough to replace the business lost as its customer base shrinks…