Apparently an issue with VM2 default.php Ref: http://forum.virtuemart.net/index.php?topic=93350

I changed FashionMart default.php line 67

from: if ( VmConfig::get('showCategory',1) ) {

to the following and it now works:

if ( VmConfig::get('showCategory',1) && !$this->search) {

Attachment show how it used to be. Now, the categories are not listed; only the search results

Hi,

Thank you so much for the info, I am sure it is going to be helpful to others.
Yes you are right. It was a bug in FashionMart.

Cheers.