MySale plunges as stock glut slashes cash
MySale lost more than a third of its value after the troubled online retailer said it was considering options to manage its working capital after an inventory glut slashed its cash holdings.
The company said it bought extra stock during the first half of 2022 but demand was hit by the spread of Omicron in Australia and delivery delays before Christmas. That left MySale with A$6.1m of stock at the end of December, up from A$2.6m a year earlier, and slashed the company's cash balance to A$3.8m from A$15.8m.
MySale said: "While the board continues to monitor the company's position, it is considering a number of strategic financing options available to manage its working capital, including reducing the A$6.1m inventory balance of which over 65% is fully paid. In light of recent trends in trading, the board is taking a cautious approach to its full year outlook."
Gross merchandise value sales rose 36% to A$86.7m in the first half but total revenue fell 6% to $59.7m because of a changing sales mix and the growth of MySale's marketplace channel. MySale said the recent trend in trading continued in January and February.
The company launched to offer big discounts on fashion, homewear and cosmetics through flash sales of end-of-season stock. Former Topshop owner Philip Green and Mike Ashley, Sports Direct's founder, invested in the company but it has been hit by a series of profit warnings that wiped out almost all its market value.
MySale shares fell 39% to 2.3p at 08:44 GMT. At their 2014 peak the shares were valued at more than 200p each.