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Redbubble grows despite headwinds

Redbubble, an online marketplace that prints designs from independent artists on a range of apparel, accessories and homewares, grew revenues and reduced losses in the six months ending 31 December 2016, despite strong headwinds.

The marketplace reported revenues of $78.7 million, up 26.3 per cent on the same period from a year ago, and a 31.3 per cent jump in gross transaction value (GTV) on a constant currency basis.

GTV growth rates were especially high in Germany (61.8 per cent), Spain (80.8 per cent) and France (33.7 per cent), where Redbubble recently launched native language websites.

Redbubble reduced its EBITDA loss to $1.1 million, down 75 per cent from a year ago, and narrowed its net loss after tax to $2.8 million.

In the six months ending 31 December 2016, Redbubble saw a rapid and unexpected shift from desktop to mobile shopping, with mobile visits now outpacing PC browsing. Although the company expects to benefit from this shift in the long-term, the immediate outlook is less favourable.

Redbubble’s conversion rate on mobile is currently 1.41 per cent, less than half the rate of conversion on desktops, and the average order value is one dollar less ($47.6 and $48.6, respectively).

While the conversion rate on both mobile and desktop has improved from a year ago, the AOV for both channels dropped. Redbubble attributes this to the strength of the Australian dollar compared to other currencies.

Negative macro-economic drivers, including the uncertainty of the political situation in the US and the economic uncertainty caused by the UK decision to leave the European Union impacted the business in the six months ending 31 December 2016.

Nevertheless, Redbubble continues to see a strong sales growth trajectory, with all GTV increasing in all regions in the world except for the UK, which declined by 1.5 percent compared to the same period a year ago.

The marketplace added new products and fulfillers in the first half of FY2017. Apparel accounted for 60 per cent of sales, while accessories, stationery, homewares and artwork about evenly divided the rest.

Redbubble has reaffirmed its full-year guidance for FY2017, which it updated in January to reflect expectations of $140-148 million, rather than the $172 million projected in its prospectus forecast.

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