Global Fashion Group’s 3Q results and seems preparing an IPO

Global Fashion Group (GFG) is the world’s leading online fashion destination for high growth markets.

GFG is dedicated to bringing fashion online in high growth markets and offers brands the chance to enter the fashion e-commerce sector in highly promising economies. We operate with five branded platforms in 24 countries and employ over 9000 people. Working closely with our partners, we have crafted the best in-class shopping experience for our customers offering over 3000 international and local brands to be delivered in a fast and convenient way.

We believe in the power of fashion.

Our mission is to be the No. 1 online fashion destination for high growth markets. We connect our customers with the brands they love and provide the best shopping experience – from Asia to the Middle East, from Russia to South America.

How We Do it

Connecting one third of the world population to leading international and local brands is the heart of our business. We aim to provide the best-in-class online shopping experience in high growth markets. We own our infrastructure value chain in order to fulfil orders in a fast and convenient way and offer free shipping and easy returns.


To ensure the best experience for our consumers and our partners, we believe in the power of an integrated and controlled value chain. GFG has developed its own warehouses and customer care centers, and its owns delivery fleets, offering last mile delivery in over 300 cities and enabling customers to pay cash on delivery in most markets.

GFG Investors

Kinnevik is an entrepreneurial investment group focused on building digital consumer businesses. Kinnevik works in partnership with talented founders and managers to create, invest in and lead fast growing digital businesses both in developed and developing countries. Kinnevik was founded in 1936 by the Stenbeck, Klingspor and von Horn families. Kinnevik’s shares are listed on Nasdaq Stockholm’s list for large cap companies under the ticker codes KINV A and KINV B.

Rocket Internet’s mission is to become the world’s largest Internet platform outside of the United States and China. Rocket Internet identifies and builds proven Internet business models and transfers them to new, underserved or untapped markets where it seeks to scale them into market leading online companies. Rocket Internet started in 2007 and has now more than 30,000 employees across its network of companies, which are active in more than 110 countries across six continents. Rocket Internet SE is listed on the Frankfurt Stock Exchange (ISIN DE000A12UKK6, RKET).

Global Fashion Group preparing IPO

The e-commerce group has already mandated investment banks to prepare for a possible listing in Global Fashion Group (GFG) in March 2019, the emerging markets online fashion retailer set up by German e-commerce investor Rocket Internet and Sweden’s Kinnevik, is planning a stock market flotation, a magazine reported on Thursday November 22, 2018.

GFG has previously said a public listing is one option open to the firm, but has not given specific plans. Rocket Internet, which holds a 20 % stake in GFG, declined to comment.

The German monthly Manager Magazin cited unidentified insiders as saying GFG had already mandated investment banks, including Morgan Stanley and Goldman Sachs, to prepare for a possible listing in March, and the management team was meeting investors in London.

The market is seen as ripe for online fashion listings after the New York flotation of Farfetch in September that valued the luxury e-commerce player at over USD 5.8 billion.

Rocket Internet has listed a string of start-ups in recent years, including food groups Delivery Hero and HelloFresh, and online furniture retailers Home24 and Westwing.

GFG, which runs fashion sites in Russia, Latin America, Australasia and South-East Asia, on Tuesday reported third quarter sales rose 17 % in constant currencies to EUR 265 million (USD 303 million).

Its loss before interest, taxation, depreciation and amortisation narrowed to EUR 21.3 million, and it had a cash position of EUR 109 million at the end of the quarter.

GFG is seeking a valuation of EUR 1.8-2.5 billion, Manager Magazin reported, above the 1.5 billion it was valued at on September 30 by Kinnevik, which holds a 35 % stake.

Here is the official press release of GFG:

GFG reached 11 million active customers and delivered continued strong growth and improved profitability in Q3 2018

Global Fashion Group (GFG), the leading online fashion and lifestyle destination for high growth markets, showed continued top line growth with Net Merchandise Value increasing by 22.7% year on year on a constant currency basis, and improved profitability by 4.6 percentage points in the third quarter of 2018 (ended September 30, 2018). We continued to execute our growth strategy across our core markets and make further progress with our brand partners and customers.

Customer measures continue to improve

Active Customers for the Group reached 11.0 million, adding 1 million since the start of the year, and representing year on year (YoY) growth of 15.8 %. Net Orders grew by 25.1 %, reflecting the continued secular growth in online retail in our end-markets and increasing order frequency of our customer base.

Continued Net Merchandise Value (NMV) and Revenue growth

Net Merchandise Value, which includes sales on GFG’s marketplace platform, was EUR 289.5 million for the quarter, growing 22.7 % on a constant currency basis and 9.2 % in absolute EUR terms. There has been significant growth in marketplace sales throughout 2018, specifically in Russia/CIS, Argentina and Australasia, bringing the marketplace contribution to NMV to approximately 15 % year to date. Group Revenue (which includes only commission earned on marketplace NMV and delivery fees) for the quarter was EUR 264.6 million, representing constant currency growth of 16.9 % or 3.2 % growth in absolute EUR terms.

Improved profitability driven by further scale benefits and operational improvements

Gross Profit margin, in Q318, at 36.2% was 2.4 percentage points lower than the Q317 margin. A stronger YoY Gross Margin in Australasia was offset by continued price investments in Southeast Asia (SEA), Latin America (LatAm) and Russia/CIS. Gross Profit margin decline was more than compensated by operational efficiency improvements, driven by optimised marketing investment, and fixed-cost scale benefits across the Group. This resulted in an overall YoY Adjusted EBITDA margin improvement of 4.6 percentage points to (8.1 )% of Net Revenue for Q318.

Regional overview Dafiti (LatAm)

In the LatAm region, NMV of EUR 91.5 million in the quarter represented a 14.4 % uplift YoY, on a constant currency basis. Revenue was EUR 82.3 million, growing 13.6 % YoY on a constant currency basis. Continued depreciation of the Brazilian Real and the Argentinian Peso resulted in absolute EUR NMV and Revenue declining YoY by (7.0) % and (10.8) %, respectively. Gross Profit margin declined by 2.2 percentage points YoY and was 40.8 % in Q3, driven largely by country mix effects.

During the quarter, the improvement in Dafiti’s fulfilment network across the country enabled faster delivery at lower costs to the North and Northeast of Brazil, combined with enhanced delivery flexibility.

Lamoda (Russia / CIS)

In the Russia / CIS region, NMV of EUR 91.7 million increased by 20.8 % on a constant currency basis, driven by accelerated marketplace growth. Revenue was EUR 85.0 million and demonstrated constant currency growth of 9.0 %. Depreciation in the Ruble reduced NMV and Revenue growth in absolute EUR terms to 9.6 % and (0.8) %, respectively. Gross Profit margin declined by 0.8 percentage points partly due to delayed uptake of Lamoda’s Fall/Winter inventory given an extended warm weather period.

In Q3, Lamoda further developed its relationship with Inditex, now offering two Inditex brands, Pull&Bear and Oysho through the marketplace platform to customers. Lamoda continued to open pickup points in new regions that led to an order increase for this delivery method. A new order confirmation tool was launched in Q3. It has enhanced customer experience and resulted in a decrease in customer service costs.

THE ICONIC (Australasia)

In the Australasia region, NMV of EUR 65.0 million grew by 38.6%, on a constant currency basis. Revenue was EUR 55.2 million, 35.3 % growth from last year on a constant currency basis. Due to depreciation of the Australian Dollar, NMV and Revenue growth in absolute EUR terms were 29.6 % and 26.5 %, respectively. Gross Profit margin increased by 0.8 percentage points to 45.7 %.

During the quarter THE ICONIC launched its designated Kids category to further enhance relevance to its customer base and capture this additional growth opportunity. To support the continued growth of the Australasia region, THE ICONIC secured additional warehouse space at its fulfilment centre, almost doubling the size and increasing the storage capacity to 4 million items. Further fulfilment efficiency benefits are expected in the future, with the Automated Storage and Retrieval System (ASRS) now fully operational, meaning a large part of the process for placing and retrieving of items is now automated.


In the SEA region, NMV of EUR 41.4 million in the quarter represented a 27.8% uplift YoY, again on a constant currency basis. Revenue was EUR 38.6 million, growing 22.7% YoY on a constant currency basis. In absolute EUR terms, the NMV and Revenue growth were 25.8% and 21.3%, respectively. Gross Profit margin declined YoY by 9.6 percentage points in the quarter to 22.6%, driven by strategic price investments across the region, partially offset by reduced marketing spend.

In the quarter, Zalora launched Revolve as an important new brand fashion partner, with Hong Kong as a pilot market. Zalora also launched an exclusive celebrity collaboration with four of the biggest celebrities in the Philippines, with over 12 million combined followers on Instagram alone, to drive marketing of the Zalora brand.

Solid financial position

GFG’s closing cash position at the end of the quarter was EUR 108.8 million. EUR 50.0 million of its Revolving Credit Facility remains undrawn.

Global Fashion Group (GFG) is the leading online fashion and lifestyle destination for high growth markets. We deliver a world-class online shopping experience to consumers in traditionally underserved markets, offering them in total over 8,000 international and local brands, alongside our own labels. GFG operates four branded platforms across four continents: Dafiti (LatAm), Lamoda (Russia / CIS), THE ICONIC (Australasia) and ZALORA (SEA). GFG additionally holds a joint venture stake in Namshi (Middle East). By connecting our customers and brands via an end-to-end value chain, we are the go-to destination for aspirational consumers who demand fast, flexible and reliable service. GFG is well-placed to further develop its strong positions in the most attractive global growth markets and capture substantial long-term growth.