ShowroomPrivé drops compared to 2021, but still does better than before Covid
After doubling its profit in 2021 in the wake of the pandemic, ShowroomPrivé presented a disappointing result on March 8. Although the company had anticipated inventory shortages at partner brands and rising freight costs, it saw inflation disrupt demand. And while the second half of the year showed an expected rebound, it was less than hoped for.
The group saw its business volume fall to 939.6 million euros, a 6% drop over the year, but an increase of 9.6% compared to pre-crisis levels.
Similarly, although turnover fell by 9.2% over the year to 657.4 million euros, it nevertheless showed an increase of 6.8% over three years. As for the gross margin of 244.7 million euros, it is down by 15.1% over the year, but up by 30.5% compared to 2019. And although the net result has fallen to 300,000 euros against 27.3 million a year earlier, it should be remembered that it was in deficit by 70.5 million euros before the crisis.
In detail, the online activity in France, which represents the vast majority of the turnover (532.3 million euros) is down by 10.5% over the year, but up by 5.6% over three years. However, the international online activity does not follow the same logic, with 117.5 million euros, down 2.7% year-on-year, and down 18.7% compared to 2019. This does not prevent international sales from now accounting for 18% of activity. The rest of the business, namely internet returns and physical wholesale destocking, remains stable at €7.5 million.
"The successful start of The Bradery, the rise of our marketplace and the success of our new service offers are evidence of the strengths we have at our disposal to return to dynamic and profitable growth very quickly," said CEO David Dayan. "There is also no doubt that our solid financial base is a major advantage for deploying our projects in the current period."
Securing stocks and inflation
As David Dayan explained to FashionNetwork.com last spring, one of the big questions for 2022 was the availability of stocks. The brands had indeed adjusted the orders placed in 2021, caught between the fear of new store closures, production problems in some supplier countries, and the delays induced by the ongoing maritime freight crisis. Against the backdrop of the brands' desire to limit the risk of unsold goods as much as possible.
In the face of this situation, ShowroomPrivé had concentrated its efforts on maintaining its stock levels. The first half of the year saw the company secure more costly stock than usual, before betting on an acceleration of stock rotation in the second half of the year. All of this was done in line with a "proactive strategy", refusing to increase prices, seeing as the company's attractive prices on major brands remains a big part of the ShowroomPrivé offer.
In addition to the brands, ShowroomPrivé must also adapt to the effects of inflation on consumers. Last year, the average basket value increased by 7% to 51.5 euros, while the number of annual orders per buyer fell by 8.4% to 3.9 purchases.
In total, 3 million members placed at least one order in the past year, compared to 3.3 in 2021, and 3.2 in 2019. Inflation has also affected the "loyal customers", meaning customers who have made at least one purchase in 2022 and one in 2021. A total of 2.3 million customers placed an order in 2022, against 2.5 in 2021 and 2.4 in 2019.
A three-pronged roadmap
"Although the deteriorating economic situation in 2022 disrupted our growth trajectory, it nevertheless enabled us to affirm the robustness of our financial profile," notes François de Castelnau, deputy CEO and CFO. "Thanks to the work carried out to maintain rigorous control of our costs and the development of high value-added services, our teams have managed to maintain satisfactory profitability despite a second half of the year in which the economic situation did not improve as quickly as expected."
ShowroomPrivé is banking on an ACE roadmap, which stands for "Adapt, consolidate and expand". The "adaptation" part involves proposing a more premium concept to attract new brands, strengthening the permanent offer via the marketplace, and developing the CSR (corporate social responsibility) positioning. On the consolidation side, the aim is, among other things, to "convert" the base of regular and high-potential buyers.
As for expansion and diversification, the roadmap is based in particular on the development of the travel business and the services offered to brands, not forgetting the acceleration of BeautéPrivé and The Bradery. The group is also banking on gaining market share in Spain, Italy, Belgium and Portugal. It also aims to "create a permanent universe within the marketplace that will include premium brands".
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