Rocket Internet’s GFG fashion group narrows losses
today Feb 26, 2019
The strength of the euro had a negative impact on the growth of the online fashion retailers included in Rocket Internet’s Global Fashion Group last year.
But the loss before interest, taxes, depreciation and amortisation (EBITDA) was narrowed by the companies comprising GFG. Adjusted EBITDA improved from a loss of €98 million ($111m) to a loss of €49.8 million ($56.5m) in 2018, the Luxembourg-based group announced on Tuesday. Among other reasons, it attributed the improvement to marketing efficiencies and reduced marketing costs.
GFG companies, including The Iconic, Zalora, Dafiti and Lamoda, operate exclusively in growth markets such as Eastern Europe, Asia and Brazil. If their local currencies against the euro, it takes a toll on the company. Sales in the year under review rose by just 5.6% to €1.16 million ($1.3m) in 2018, compared with a rise of almost 25% a year earlier. On a constant currency basis, sales grew by almost 19% in 2018 - closer to the previous year’s level.
Global Fashion Group is reportedly considering a stock market flotation and could be filing for an IPO as early as March, Manager Magazine reported in November last year.
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