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  • Catch Group reports a major loss after $24.9m writedown

    Catch Group reports a major loss after $24.9m writedown

    E-commerce company Catch Group reported a $17.8 million loss for the year ended 30 June, 2017, after booking a $24.9 million impairment on the value of its goodwill.

    The writedown was in the company’s services business unit, which comprised its daily deal business, Scoopon, which it sold to Lux Group on 1 December, 2017.

    This follows the $113.8 million loss Catch reported in 2016, after writing down the value of its goodwill and trademarks by $125 million across its products and services businesses.

    According to a financial statement filed with ASIC earlier this week, the writedowns are the result of a management review of the company’s five-year cash flow forecasts due to recent trading performances.

    The Scoopon sale was part of a broader asset swap between Catch Group and Lux Group, which involved Catch acquiring Lux Group’s discount apparel site, Brands Exclusive, and discount homewares sites, The Home, and Lux Group acquiring Catch’s travel booking sites, BonVoyage and Scoopon Travel.

    The two companies also merged their daily deal sites, including Scoopon, Cudo, LivingSocial, Deals.com.au and New Zealand-based TreatMe, into a joint venture with 50-50 ownership.

    According to Catch Group’s financial statement, it paid $2 million to Lux Group and received $8.8 million cash and 46 per cent of the shares in Lux Everyday Pty Ltd.

    $13.7m EBITDA before writedown

    Excluding the goodwill impairment expense, Catch posted $13.7 million in EBITDA in 2017, up 12.5 per cent on 2016.

    The online retailer generated $240.9 million in revenue in 2017, a 2.6 per cent increase over its 2016 revenues of $234.8 million.

    “The current performance of our business is outstanding,” Catch Group chief executive Nati Harpaz told.

    “The launch of the marketplace exactly one year ago has accelerated our growth and we now generate more than $1 million of sales every day with more than $2 million weekly sales coming from marketplace.

    “The key to growing our marketplace has been the growth in sellers which now tops 1,000 sellers and more than 1 million SKUs available on the website. This number continues to grow despite the fact that we are very selective as to the curation of our marketplace and who we invite to join our ecosystem.”

    The launch of the marketplace and Catch Connect, a new mobile phone service the company rolled out in February, are expected to have a positive impact on the company’s revenue in 2018.

  • Catch spends millions on trust play

    Catch spends millions on trust play

    Catch Group’s first foray into the world of TV advertising has cost the e-commerce company millions, as it looks to bolster its brand awareness ahead of the imminent arrival of Amazon.

    It’s first TV campaign, which has been airing for two-weeks, is part of a long-term marketing play to first establish Catch’s new marketplace image in the local market before beginning to communicate price and range later down the line.

    Catch Group’s head of marketing, Ryan Gracie, told that the campaign was initially designed alongside the company’s re-brand to drive awareness and begin building trust – something pureplay retailers have struggled with in recent years.

    “Building a brand online is very hard and you have to really take yourself above the line if you want to be a trusted, credible brand,” Gracie said.

    “We’re a pureplay, we don’t exist physically so it’s important for us to exist on these other channels.”

    Gracie was unable to say what the return looks like so far, but said a decision was taken by management on TV knowing that assessing the benefits wouldn’t be clear cut.

    “The hard costs of the media spend is a major inhibitor, because you can’t explicitly measure the impact of it,” he said.

    “What do you get when you advertise on TV? You get a warm and fuzzy feeling, but you have to trust it’s going to work.”

    The ads themselves depict Australians in various scenarios screaming “catch” – in line with the company’s “screaming good deals” philosophy.

    Catch is investing in marketing on both sides of the market at the moment, having also stepped up its B2B marketing since its brand relaunch to encourage more suppliers to jump on its platform.

    Catch Group co-founder Gabby Leibovich told sister site Internet Retailing in August that more than 200 brands have signed up to the marketplace, with 25,000 new SKUs recently added across several new categories.

    Nati Harpaz, CEO of Catch Group, is the chairman of Octomedia, Inside Retail’s parent company.

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