San Francisco-based fashion group a.k.a. Brands swung to a loss in the fourth quarter as its sales dropped 18.3 percent.

The group, whose portfolio includes Princess Polly, Mnml, Petal & Pup, Rebdolls, and Culture Kings, made net sales of 149.1 million dollars in the three months to December 31, down from 182.4 million dollars in the same period a year earlier.

It said the drop was driven by a 14 percent decrease in the number of orders processed and an 8 percent decrease in the average order value, which were linked to lower marketing spend and a lower mix of full priced items sold.

The company made a net loss of 173.9 million dollars in the quarter compared to flat profit in the prior year period, while its adjusted EBITDA narrowed to 6.1 million dollars from 16.1 million dollars.

a.k.a. Brands also said Thursday that chief executive officer Jill Ramsey “will be taking time to work through unforeseen medical issues” but “will remain as active in the business as her health allows and will remain on the board”.

On an interim basis, finance chief Ciaran Long will step in as CEO.

Challenging Q4

Commenting on the results, Ramsey told investors: “As we went through the quarter, we saw lower marketing effectiveness given the highly promotional environment, and we made the strategic decision to reduce our spend compared to last year in an effort to balance growth and profit.

“Additionally, as we aggressively tightened our inventory in the second half of the year, there were fewer new styles in our women’s brands during the peak holiday selling period.

“These decisions, combined with the macroeconomic pressures, impacted our performance in the quarter but enabled us to protect the integrity and durability of our brands and business model for the long term.”

For the full year, the group made net sales of 611.7 million dollars, up 8.8 percent from the prior year, but down 0.3 percent pro forma adjusting for the acquisition of Culture Kings

The company’s full-year net loss widened to 176.7 million dollars from 6 million dollars a year earlier, while its adjusted EBITDA narrowed to 31.9 million dollars from 62.4 million dollars.

Looking ahead at the fiscal 2023 year, a.k.a. Brands expects net sales of between 570 million dollars and 600 million dollars, and adjusted EBITDA of between 35 million dollars and 37 million dollars.