MySale's shift to marketplace platform delivers results
Big operational changes at MySale have borne fruit. The international online fashion and lifestyle retailer’s shift to an Australia/New Zealand focus while scaling the business to operate on a new marketplace seller platform has certainly worked.
It’s led to strong core sales with core earnings ahead of market expectations for the 12 months to 30 June, the London Stock Exchange-listed company said on Wednesday.
“We have made significant changes to the leadership team which has delivered immediate results, particular in the group's marketplace platform, which has scaled rapidly with the addition of over 200 new sellers”, CEO Carl Jackson said in its trading update.
And with that sort of traction, MySale said it expects growth to accelerate “at pace”, with marketplace revenues expected to “increase significantly” in FY22 to become the group's largest channel.
“This exceptional growth enables the business to scale without a corresponding investment in inventory”, it added.
For the year, group underlying EBITDA forged ahead to a gain of A$4.2 million against a A$2.7 million loss in FY20. Gross profit increased to A$46.3 million from A$43.9 million 12 months ago. Gross profit also increased to A$46.3 million from A$43.9 million.
Core revenue rose 14% to A$122 million, although group total revenue fell 4% to A$125.6m, “in line with management expectations", reflecting its marketplace focus.
MySale also noted it had maintained a $A9.1 million net cash position and remained debt-free.
Other positives included scaling up the amount of its selective higher-margin own-stock inventory, with a focus on buying "width not depth" and adopting a "test and repeat" strategy. This channel now represented 16.7% of sales (FY20: Nil) and is forecast to continue to scale in FY22, it said.
Meanwhile, the group's “counter-seasonal proposition continues to resonate with international partners and we are seeing an excess of global inventory”. But it did note “the reliability and costs of international shipping remains challenging”.
And the outlook? “Cautious”, although it expects FY22 group revenues to be “materially ahead of current market expectations, driven by this accelerated growth in marketplace revenues”.
But it does expect FY22 group gross margin to slip to around 31% as it continues to drive a greater mix of marketplace revenue.
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