The Iconic has recorded a net merchandise value (NMV) decrease of 18.4% year-on-year (YoY) for the third quarter of 2023.
Parent company Global Fashion Group (GFG) attributed the result to weak consumer sentiment in the region.
According to ANZ bank and Roy Morgan, consumer confidence has been below the mark of 85 for 40 straight weeks, with the index hitting 77.8 this week.
GFG’s other markets have not fared well either, with its Dafiti marketplace in Latin America recording a 22.5% YoY drop in NMV, while Zalora in Southeast Asia dropped 17.3%.
Across the company, GFG recorded a total revenue drop of 25% in the third quarter of 2023, while its gross margin lifted to 42.1% from 40.8% in last year’s third quarter.
According to GFG, cost of living pressures escalated across its markets in the first half leading to further step-downs in consumer spending and sentiment in Q3.
“As a result, topline figures were weaker than expected,” the company noted. “Orders were down 26.0% and Active Customers by 19.1%. Average Order Value increased by 9.0% due to multiple factors including elevated inflation, lower items per order and mix effects. This partially offsets the direct impact of fewer orders on NMV.”
GFG CEO Christoph Barchewitz said despite the prolonged headwinds across all markets, the company remains resolute in executing its strategy.
“This includes our transition to a robust platform business and emphasis on driving technology-enabled efficiency through reducing costs and complexity,” he said.
“We firmly believe that these actions will position GFG favourably for a brighter market environment ahead, which we are confident will materialise.”
Meanwhile, GFG reduced its overall inventory by 27% YoY, equivalent to a €60 million (~AUD$100 million) reduction in constant currency. Whilst inflation and lower volumes continue to exert pressure, GFG is confident that its ongoing cost action plans will position the business well for 2024.
The group’s expectations for the full year 2023 include an NMV decrease between 16-18%, with a revenue of around €0.8 billion (~AUD$1.3 billion).