Fashion group puts €194m into Irish unit
Global Fashion Group, the e-commerce retailer that's backed by German startup investment giant Rocket Internet, has established a Dublin-based financing unit with a €194m cash injection.
Global Fashion Group operates clothing websites in markets including Asia, South America and Australia.
It raised €330m last year, cutting its valuation to €1bn - half what it was a year earlier.
The group established an Irish financing unit in December and shored up its balance sheet just days before Christmas with €194m.
The directors of the Irish division include chief financial officer Nils Chrestin, head of tax and treasury Matthew Hodgson, and Helen Hickman, the group's head of finance. Many companies establish such units here to facilitate activities like inter-company funding.
Rocket Internet created Global Fashion Group to house its online fashion businesses. It now operates five branded platforms in 24 countries.
Rocket contributed €68m to the €330m funding round for Global Fashion Group last year.
As part of its investment, Rocket converted financing it had previously contributed, leaving the Berlin-based company with a 20.4pc holding.
Demand from existing investors increased the amount of the funding round by €30m from the €300m it was initially anticipated would be raised.
The €68m from Rocket did not include any investment by Rocket Internet Capital Partners, a related financing vehicle controlled by Rocket ceo Oliver Samwer. But Rocket Internet Capital Partners did contribute an unspecified amount to the Global Fashion Group round.
Swedish investment firm Kinnevik stumped up €161m to increase its stake to 35pc.
In November, Global Fashion Group reported a narrower loss for the third quarter as rising sales and reduced costs brought it closer to profitability.
The adjusted loss narrowed to €32.3m from €54m a year earlier. Net revenue rose 16pc on a constant currency basis to €250m, even as the company faced increasing pricing pressure and "macroeconomic challenges" affecting its Dafiti, Lamoda and Namshi brands.
The fundraising, added to the sales of businesses in India, Thailand and Vietnam, resulted in the group having a pro forma cash balance of €284m at the end of the third quarter.
Its biggest unit by revenue in the third quarter was its Dafiti brand, which operates in Brazil, Colombia, Argentina and Chile.
It reported net revenue of €80.1m for the quarter, up 36pc year-on-year because of beneficial exchange rates. On a constant currency basis, however, sales were down 0.9pc.