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International online retailer MySale has announced that revenues fell by 6% to A$59.7m (£31.5m) in the six-month period to 31 December 2021, following a changing sales mix and growth of the marketplace channel.
Gross Merchandise Value increased by 36% to A$86.7m (£46m) however, reflecting progress in scaling the group’s off-price marketplace platform, which is expected to become its largest sales channel, underpinned by its higher margin own-stock channel.
Overall, gross profit was A$24.9m (£13.1m), with gross margins improving to 41.8%, an increase of 370 basis points against H1 FY21. However, supply chain volatility in the second quarter impacted on broader profitability.
During the period, the group invested in additional own-buy inventory, but subdued demand, driven by the speed of the spread of the Omicron variant in Australia, and delays in stock deliveries prior to Christmas meant that inventory built up to a higher level than expected.
In light of this, the inventory balance at 31 December 2021 was A$6.1m (£3.2m), up from A$2.6m (£1.4m) in H1 FY21, and the group’s cash balance was A$3.8m (£2m), down from A$15.8m (£8.3m) the prior year.
The group said it is now considering a number of strategic financing options available to manage its working capital, including reducing the inventory balance, and looking ahead, the it is taking a “cautious approach” to its full year outlook.
Kalman Polak, MySale CEO, said: “The new management team has continued to scale our marketplace platform, which is complemented by our own-stock channel. The group has worked hard to navigate recent headwinds in lower consumer demand driven by the impact of the Omicron variant and supply chain challenges.
“The group’s increased inventory position is of a high quality. Notwithstanding these challenges, we remain confident and are well positioned to capitalise on the long-term opportunity for the group.”
