MYSL.L Share News (MYSL)

(Sharecast News) - Australian online retailer MySale said on Monday that it was putting itself up for sale as it announced the launch of a strategic review.As well as a formal sale process, the review will include options to raise additional capital to support the ongoing restructuring and rationalisation of the group and reduce debt, and the sale of certain parts of the company and de-listing of its shares from AIM.MySale said it has continued to experience "challenging" trading conditions in Australia, its largest market, mostly due to the market disruption caused by changes to goods and services tax regulation introduced in July 2018. This was exacerbated by product mix, international cost base and inventory location, it said."This has had and continues to have a negative impact on the group's financial performance with declines in revenue, gross profit and gross margin," MySale said."The board has implemented a detailed action plan to address these challenges which is ongoing, focusing on its activities and opportunities in the Australia and New Zealand region through its 'ANZ First' strategy."As part of the strategy, MySale is closing its UK and US operations and has disposed of its UK website, cocosa.co.uk to Brandalley UK Limited. In addition, it is streamlining its supply chain to ANZ and South East Asia with international suppliers bulk shipping product to the Australian distribution centre where it is then shipped direct to customers. This delivers freight savings and operational leverage to the group.The company said these actions are expected to deliver a material reduction in costs and deliver improved business performance in FY20, when it is expected to show improved profitability and be cash generative."The group continues to operate within its existing banking facilities, the majority of which are repayable on demand, and is in discussions with its bank who have indicated that they are supportive of the strategic review."However, given the market challenges that the group continues to face and the reduction in financial performance, it is possible that additional funding may be required in the short term to support the restructuring and cost reduction initiatives being undertaken and ongoing working capital requirements of the company."Russ Mould, investment director at AJ Bell, said: "Flash sales are time-limited sales events in which fashion, beauty and homeware products are offered to a closed member base. Customers get access to leading brands at low prices, while firms have an avenue to dispose of excess stock at a discount."This seems like it could be a winning proposition, but it is one on which MySale has failed to execute. Given Mike Ashley's appetite to own even the most beaten-up retail vehicles, think Debenhams or House of Fraser, the fact the Sports Direct owner put his holding on the scrapheap last month should have been a clear warning sign that MySale was in trouble."Today's news is the culmination of a steady decline which has seen the business go from a £340m valuation at its listing in 2014 to a little over £10m before the shares were suspended."The company exited the UK market earlier this year and its core Australian business has been hit by changes in regulation."Fellow retail tycoon Philip Green continues to hold a large stake in the company but probably has enough on his plate rescuing Arcadia to come to MySale's rescue."At 1355 BST, the shares were down 62% at 2.57p.