“In a context of high inflation and a significant slowdown in demand affecting all players in the consumer sector, the dedication and commitment of Spartoo’s teams enabled us to improve our operating cash flow over the half-year. The optimization of our marketing investments combined with the reduction of inventory in value on our B2C Online activities enabled us to limit the decline in revenue while significantly improving our EBITDA and operating cash flow. Our own brands, our points of sales and our third-party services also achieved double-digit growth over the half-year, underlining the economic relevance of our multichannel model”, commented Boris Saragaglia, co-founder, Chairman and Chief Executive Officer of Spartoo.

First Half Results

In the first half of 2023, the company’s GMV totalled 101.6 million euros, declining by 2.6% from the 104.3 million euros recorded in the same period of last year; the percentage of GMV generated by brands owned by the retailer increased in this period to 10.2% from 9.8%. Meanwhile, its revenue fell to 72.9 million euros from 73.9 million euros in a similar period last year.

At the end of June, the group’s inventory decreased by 2.8% in volume and by 0.5 million euros in value, as compared with the 31^st of December 2022, in line with its target of reducing inventory by the end of 2023. In addition, its online inventory was down by 7.7% in volume and 4.1% in value, when compared to the referred period.

Spartoo also reported that opened 11 new points of sales during the period, including 2 stores, the other points of sales being corners and affiliates; therefore, operates now 42 points of sales, including 20 corners in department stores.  

In the first semester of the current fiscal year, the group’s gross margin was 28.9 million euros, representing a margin of 39.7%, as compared to 30.6 million euros and 41.4% gross margin registered in the same period of 2022.

Spartoo highlighted that “despite a sharp rise in costs”, its EBITDA “improved significantly”, and was close to breakeven with a loss of 0.3 million euros, on a comparable basis to a loss of 3.1 million euros posted in the first half of the previous year. This was due to a decline of 38% in the cost of acquiring new customers to 11.0 million euros, as compared to 18.0 million euros a year earlier. 

Moreover, in the six months to the 30^th of June, the retailer’s net loss narrowed to 2.0 million euros from 4.6 million euros in a similar period of the prior year.

The French-based retailer’s operating cash flow stood at negative 0.5 million euros, as compared with a cash burn of 7.4 million euros a year earlier. “We aim to achieve positive free cash flow in full-year 2023, despite a difficult back-to-school period”, concluded Saragaglia.