Girls flea market makes a loss of 2.4 million euros

The start-up presents its business figures for 2020. In it, it also records a deficit not covered by equity.

The troubled second-hand platform Mädchenflohmarkt has quietly published its business figures for 2020 - and they don't look rosy at all. According to the figures published in the Federal Gazette, the start-up posted a net loss for the year of 2.4 million euros, significantly more than a year earlier. At that time, the start-up had to cope with a loss of 1.6 million euros, according to the balance sheet.

This is another setback for the company, which once started with great ambitions, but in the past attracted attention with late payments and problems, as Startbase has already reported several times. Actually, Mädchenflohmarkt wants to pay out the sellers, according to its website, as soon as the customers have received their product and confirmed that everything is fine with it. Mädchenflohmarkt acts as a kind of trustee so that buyer and seller can settle the deal as securely as possible and collects a commission of ten percent for this. In the past, however, many users complained that the money was paid out very late or not at all. Mädchenflohmarkt initially explained this by saying that it had to fend off fraudsters, but later the start-up blamed it on internal accounting changes and promised that everything would soon be back to normal. But to this day, users are still waiting for their money, as they write on Trustpilot .

The new figures now show an uncovered deficit of the start-up. This arises when the accumulated debts are greater than the assets of a company. In accounting terms, one then speaks of a deficit not covered by equity. In 2019, this deficit did not yet exist at Mädchenflohmarkt, but in 2020 it amounted to 2.1 million euros. So does the start-up have significantly bigger problems than previously thought?

In 2021, they were still talking about having reached break-even. The notes to the annual financial statements also state that management is planning on a "sufficient liquidity situation between August 2022 and December 2023." Thus, the company assumes "increasing sales revenues due to the current trend of sustainability" and also inflation. The reasoning: If everything becomes more expensive, more people will turn to second-hand clothes.

However, it is by no means certain that these developments will occur in this way. In the annual financial statements, it is stated with regard to this liquidity situation: "However, this presupposes that the assumptions underlying the liquidity planning with regard to sales and cost reductions expected as a result of the restructuring also materialize." Should there be a "significant deviation from the assumptions" here, "the Company will be dependent on supplementary financing from the Company." In plain language, this means that if Mädchenflohmarkt does not manage to generate more sales and at the same time reduce costs, the Stuttgart-based start-up will probably soon need new money from its shareholders.