The Iconic has recorded a net merchandise value (NMV) decline of 9% year-on-year in the second quarter of 2023, according to parent company Global Fashion Group (GFG).
Increasing interest rates, elevated inflation and gross domestic product declines were cited as key reasons for the dip, as they impacted discretionary spending and led to higher levels of discounting.
As well as The Iconic in Australia and New Zealand, GFG operates Zalora in Southeast Asia and Dafiti in Latin America.
Overall, GFG’s NMV was down 14.7% year-on-year (YoY) to €346.5 million. Demand was weaker than expected, with online orders down 28.1% and active customers down 19.0%.
GFG noted the lower topline was partially offset by an 18.7% increase in average order value (AOV), with inflation driving more than half of the increase.
The remainder was split between country and category mix, including a shift to more premium products, along with an increase in items per order.
Revenue was down 18.6% YoY to €223 million in Q2 2023.
GFG expects to deliver NMV growth of negative 15-10%, circa €1.3-1.4 billion in NMV and circa €0.9 billion of revenue, all on a constant currency basis.
Adjusted earnings before interest, tax, depreciation, and amortisation margin is expected to be negative 8-6%. Capex investment will be circa €30 million.
GFG noted that managing inventory levels remains a top priority for the company, along with customer acquisition and restricting overhead and capital investments.
In H1 2023, GFG reduced inventory levels by 33% - €67.5m reduction in constant currency - and reduced intake by 30% YoY.
“Macro pressures continue to impact customer behaviour in GFG’s markets, which is reflected in our Q2 results,” GFG CEO Christoph Barchewitz said. “While our topline is challenged in the near term, our commitment to improving each of our regions’ propositions for demand recovery, remains strong.
“These improvements will grow our platform and are adapted to our current focus on careful cost and inventory management.
“We are confident in our ability to navigate these challenges and in building long-term value for our customers, partners and shareholders.”
GFG ended Q2 with a strong funding position of €466.7 million pro forma cash and €173.2 million pro forma net cash.