Fashionette AG achieved operating earnings (adjusted EBITDA) increase to 1.5 million euros in the first six months of 2023.

The company said in a release that operating cash flow improved from negative 7.1 million euros to negative 3.8 million euros.

In light of the effects of the cost-cutting and efficiency program, Fashionette raised its forecast for the operating result (adjusted EBITDA) from the previous 2 to 3 million euros to 5 to 6 million euros. The company continues to expect sales growth of between 5 percent and 8 percent.

The company attributed the improvement in profitability to a comprehensive cost-cutting and efficiency program. In the process, the loss-making smartwatches and beauty business units were discontinued, material costs were reduced, marketing expenses were cut, and administrative costs were adjusted.

Fashionette AG increases earnings the first half of 2023

The company added that revenues for the period decreased from to 62 million euros, in line with expectations, following the focus on higher-margin products and the discontinuation of the beauty and smartwatches business units.

Commenting on the trading update, Dr. Dominik Benner, CEO of Fashionette AG said: "Our cost-cutting and efficiency program is working better than expected: We will be significantly more positive in earnings in the second half of the year and are therefore raising the forecast noticeably. Revenues will pick up strongly as a result of our entry into the platform business with luxury fashion from the end of September 2023, so that Fashionette's full-year revenues will increase accordingly."

In particular, the launch of the platform business for luxury fashion is expected to contribute to significant sales growth from September onwards. The company further said that the revenues in the fourth quarter are also always the strongest revenues in the course of the year for Fashionette.

The company also expects to increase the number of new customers by 3 percent to 6 percent in 2023 and to grow the average basket of goods to at least 200 euros and a gross merchandise volume (GMV) of 370.6 million euros.