Fashion platform The Iconic has become the first business under Global Fashion Group to record active customer growth after recent challenges for GFG in its core markets.
The Iconic’s active customers lifted by 0.2 per cent for the first quarter of 2025, matched with a 6.6 per cent lift in its net merchandise value (NMV) in the same time frame.
The ongoing rises in NMV follows recent slumps, with double-digit quarterly declines in late 2023.
GFG overall delivered €226 million (~A$401 million) of NMV, representing a 1.3 per cent increase year-on-year in the first quarter.
NMV was supported by a 3.6 per cent year-on-year increase in average order value which offset the 2.1 per cent decline in orders. The rate of active customers decline continued to slow to negative 5.2 per cent “as a result of lower churn and higher reactivated customers.”
The AU/NZ fashion platform’s NMV growth was behind GFG’s Dafiti platform in Latin Ameria, which recorded a 14 per cent lift, but was well-ahead of Zalora in Southeast Asia, which reported a 14.4 per cent decline in NMV.
All of GFG’s regions delivered gross margin expansion and contributed to the group achieving a margin of 46 per cent in Q1, increasing 2.1 percentage points compared to Q1 2024.
This improvement was reportedly driven by improved retail margins from less discounts and reduced aged inventory along with stronger marketplace commissions. Margin expansion coupled with cost reduction initiatives drove a 3.9 percentage point improvement in adjusted EBITDA margin reaching negative 7.3 per cent for Q1.
“Q1 has seen us off to a strong start for the year as we carried Q4’s momentum and achieved both positive NMV growth and substantial margin gains,” GFG CEO Christoph Barchewitz said. “Our customer engagement and marketing efforts boosted reactivations and reduced churn, which has been particularly strong in ANZ, as the first region to return to active customer growth.
“These results confirm the effectiveness of our strategy and our progress towards our sustainable financial profile.”
GFG also improved its adjusted EBITDA by €6 million and reduced capital expenditure by €3 million. A €14 million higher working capital outflow offset these cash flow improvements.
According to GFG, this was mainly due to year-on-year differences in inventory intake timing and associated payments. Additionally, some marketplace payments that would typically have occurred in Q4 were instead made in Q1 due to Cyber Monday falling slightly later than usual.
These timing impacts, GG reported, in addition to seasonal inventory replenishments resulted in a normalised free cash flow of minus €61 million.
GFG closed Q1 with €158 million pro-forma cash and €98 million pro-forma net cash.
Looking ahead, GFG confirmed its full-year guidance, expecting NMV to fall in the range of plus or minus 5 per cent year on-year, implying €1.0-1.1 billion of NMV.
Adjusted EBITDA is expected to be breakeven.
GFG added that as a locally operated business without supply chain exposure to the United States, the company’s three key markets are not directly impacted by the recently announced US tariffs.
However, it did mention that global macroeconomic trends, geopolitical events, trade barriers and regulatory changes could all affect GFG’s markets’ consumer sentiment, supply chain and competitive landscape.