fashionette released final Q4 results, slightly below prelims and provided an initial FY 23 outlook, which was broadly meeting expectations. The release reflects that fashionette remains one of the fastest growing eCommerce pure-plays despite a challenging market environment. Additionally, new CEO Benner is seen to reposition the company, aiming for a platform transition starting already in Q3 this year while at the same time unlocking efficiencies within the company. With fashionette’s exposure to the structurally growing and highly profitable luxury fashion vertical, the company should be poised for profitable growth in the coming years.

In FY23e, fashionette expects net revenues to grow by 5-8% yoy to € 173-178m (eNuW: € 176m, eCons: € 177m) sustaining the positive organic growth trend seen in FY 22 despite macro challenges. Notably, the guidance already implies a negative single-digit €m effect from the discontinuation of beauty and smartwatches, which the new management considered unattractive due to low margins and stiff competition. Adj. EBITDA is expected in the range of € 2-3m (eNuW€ 2.8m, eCons: € 3.0m), implying a margin of 1.4% at mid-point. This represents an improvement of c. 1.2pp yoy even though one-off restructuring expenses to the tune of € 1.8-2.8m should weigh on the bottom-line in FY 23e. To this end, management started to review internal processes and identified cost savings in marketing and admin functions (i.e. personnel). Cost saving measures are implemented in FY 23e and should yield first positive results from FY 24e onwards.

At the same time, CEO Benner confirmed the ambition to transform fashionette into a true luxury eCommerce platform in the mid-term. In Q3 2023, first B2B partners will be connected to the ecosystem and the number should rise to 150 until year-end. fashionette will also start to distribute luxury fashion (i.e. clothing). CEO Benner considers fashionette well differentiated against rivals such as MyTheresa or farfetch thanks to unique features such as pay later or rate payment. At the same time, the market opportunity in the online luxury segment looks big enough to cater growth and solid margins for several players in the industry. Operating online platforms across 16 verticals, fashionette should strongly benefit from cross-selling and The Platform Group’s know-how regarding tech, data, marketing and logistics.

Hence, trading at 0.7x book value, the stock looks attractively valued and we confirm BUY with an unchanged PT of € 21.00, based on DCF.