Australian fashion platform The Iconic has recorded a 16.4 per cent decrease in net merchandise value (NMV) for the first quarter of 2024.
This follows similar double-digit drops in past quarters, including 12.6 per cent in the fourth quarter of 2023, and an 18.4 per cent drop in the third quarter.
NMV is the value after deducting all fees and expenses from gross merchandise value.
According to its parent company Global Fashion Group (GFG), the latest decrease reflects a stronger year-on-year comparator in the Australian/New Zealand market as the consumer spending slowdown began later in its other key markets. GFG also operates Zalora in Southeast Asia and Dafiti in Latin America, with these two markets also recording double-digit drops in NMV.
Despite the NMV dive, GFG reported that its three key markets delivered gains in margin. The largest quarterly gross margin increase was recorded in Southeast Asia, at 5 percentage points to 44.6 per cent, driving an overall margin increase for GFG of 3 percentage points to 44 per cent.
According to the group, the gross margin improvements were driven by better retail margins from healthier inventory profiles at the start of the year and continued growth in marketplace and platform services across all regions.
GFG did not report The Iconic’s latest gross margin increase, however, in the fourth quarter of 2023, the online platform had a gross margin of 46.4 per cent, which was up by 1.5 percentage points.
Overall, GFG delivered an NMV of €239 million (A$392.36 million), representing a 16.5 per cent decrease year-on-year as customer demand remained under pressure. Orders declined by 18.1 per cent as a result of lower traffic and conversion rates, GFG noted, while average order value increased 1.9 per cent, reflecting inflation impacts being mainly offset by lower items per order.
“We are progressing our strategy with our platform transition and cost efficiency programme delivering improvements in profitability in Q1,” GFG CEO Christoph Barchewit said. “Both gross margin and adjusted EBITDA margins expanded despite topline pressure.
“I am pleased by how we are not only implementing our strategy but also actively adapting it with new initiatives, demonstrating our commitment to navigating this market with creativity and differentiation.”