Hamburg-based online fashion retailer About You Holding SE had already admitted in mid-September that business in the second quarter of the 2022/23 financial year was worse than expected. This has now been confirmed in the current interim report, which the e-commerce specialist presented on Tuesday. Although the company increased its sales, the loss was significantly higher than in the same period last year. About You now wants to react to this with austerity measures.
Weak buying mood in Germany slows down sales development
In the months of June to August, group sales amounted to EUR 430.6 million, which corresponds to growth of 8.9 percent compared to the same quarter of the previous year. In the core DACH region, which includes Germany, Austria and Switzerland, revenue increased by just 4.7 percent to EUR 206.7 million. The online retailer justified this with a “strong decline in consumer sentiment, especially in Germany”. In the other European markets, sales increased by 28.6 percent to EUR 209.5 million. Revenues in the TME (Tech, Media and Enabling) segment, in which the company’s B2B services are managed, grew by 17.0 percent to EUR 46.2 million.
The unexpectedly weak demand also weighed on the result, especially as the online retailer had to post higher operating expenses. Profitability was under pressure from “a slowdown in revenue growth and a cost structure that was designed for business to recover from the second quarter,” the company admitted. At EUR 42.8 million, the loss before interest, taxes, depreciation and amortization (EBITDA) adjusted for special effects was more than three times as high as in the same quarter of the previous year, when it was only EUR 13.1 million. The reported net deficit increased by 81.1 percent from 35.0 to 63.4 million euros.
In the entire first half of the year, the Group achieved sales of EUR 934.8 million, exceeding the corresponding prior-year level by 14.3 percent. The reported net loss grew from 58.5 to 107.8 million euros.
Management is planning cost reductions, but is sticking to its forecasts for the year
The company, which had already lowered its annual forecasts in September, now wants to counter the adverse situation with savings: “The current economic situation has increased the pressure on the market for fashion e-commerce. This makes it more difficult to make predictions about consumer behavior,” admitted co-CEO Hannes Wiese in a statement. “We expect difficult market conditions to last longer, but have responded quickly and are focused on actions that will allow us to return to our long-term growth trajectory and manage market volatility.”
Specifically, About You is planning, among other things, an “adjustment of orders for the autumn/winter collection 2022 and spring/summer collection 2023” as well as the “tightening and standardization of return targets in marketing and a reduction in content and media costs”. Further measures are the “optimization of unit costs in logistics and expansion of the partner business”, the reduction of new hires “in non-technical functions” and initiatives to “increase overhead cost efficiency”.
Management stuck to its current forecast for the year despite the further downturn in the buying mood. It is therefore still expecting an increase in sales of ten to twenty percent to EUR 1.905 to 2.078 billion and an EBITDA adjusted for special effects of between EUR -120 and -140 million.