AIM-listed fashion retailer grew revenues to £4m but saw pretax losses jump to £9.1m
Companies: Koovs
Indian online fashion retailer Koovs Plc has released its interim results for the period to 30 September, showing widening pretax losses in the period as it continued to invest heavily in marketing programmes.
The AIM-listed firm said its revenues had doubled to £4m but confirmed its pretax loss had increased to £9.1m (from £5.7m) as the firm poured resources into marketing and technology in order to build presence in the market and expand operational capabilities.
Koovs' sales were driven by impressive web traffic growth, more than doubling Yoy to 38m sessions, contributing to 40% of all sales. Its registered base grew to 1.5m and active customers increased to 431k from 181k. Koov's app also recorded impressive growth, with a 421% increase in orders via mobile.
Indian bank note saga
Commenting on the Indian Government's decision to replace the Rs500 and Rs1000 notes with new Rs500 and Rs2000 denominations, Koovs said it had caused short-term cash liquidity issues:
"With cash on delivery a standard feature in India, ecommerce companies have been affected. The management's rapid response to offer flexible customer payment options, including door step conversion to card and e-wallet payments, and an increased focus on highly targeted marketing promotions, has resulted in a shift to 50% digital payments (from 30%), strong YoY growth in November 2016 and one of our best sales days ever during December."
CEO Mary Turner said the firm had delivered on both strategic and financial objectives, posting results in line with expectations.
"The increases in our customer base, registered base and social followers will provide an excellent opportunity for future growth. Whilst demonetisation had a short-term impact on the market and ecommerce we have seen good growth in November and had some of our best days for sales in December."
Turner said the Indian online fashion market is expected to grow to £2.5bn by 2020, and she reaffirmed her belief that Koovs was well placed to capture a "significant" market share in that rapidly growing market:
"...the combination of a strengthened management team, our exclusive London-based designs and operational expertise in India, mean Koovs is well-positioned to capture a significant market share in this rapidly growing market."
Koovs shares fell slightly as the market opened on Thursday before tumbling further to -8% by 9 a.m.
