Koovs plc (AIM:KOOV), the fashion-forward business focused on the young Indian e-commerce market, today announces its preliminary results for the year to 31 March 2018.
Koovs is focused on building KOOVS.COM into the leading fashion destination in India. The Company is headquartered in London, where the majority of its design and buying team is based, with all other operational functions based in India.
Mary Turner, Chief Executive Officer, Koovs, said: “Last year was marked by concerns over funding and we managed our cash position prudently by reducing our marketing expenditure, which inevitably impacted sales. However, I am delighted that since FY18 we have successfully secured the requisite funding from a number of investors including our strategic partners in HT Media and Future Lifestyle Fashions Limited. We now have the necessary capital to put Koovs back on track, deliver on our strategy and accelerate our sustainable growth plan.
“Despite reducing our marketing spend last year, we continued to grow brand awareness and maintained our leadership position for customer experience and engagement, becoming one of Asia’s most trusted brands. This shows the strength and resilience of our brand. I am also pleased we were successful in continuing to deliver high value sales with improved margins in a wider market driven by deep discounting.
“Looking ahead, growth is returning the India’s ecommerce market and with our funding now secured, we are resolutely focused on scaling the business to leverage our competitive advantages as India’s best-established affordable fashion brand in what is the world’s fastest growing major economy.”
FY18 Financial headlines:
- Gross order value* down by 21% to INR1,259m / £14.8m (FY17: INR1,616m / £18.6m) following reduction in marketing spend due to focus on cash conservation given funding requirement in period
- Improved quality of sales with trading margin* up by 163% to INR114m / £1.3m (FY17: INR43m / £0.5m)
- Trading margin percentage increased by 1,000bps to 14% (FY17: 4%) reflecting focus on reducing markdowns and driving high value sales
- Koovs plc revenue down by 29% at INR543m / £6.4m (FY17: INR761m / £8.7m)
- Pre-tax loss reduced by 22% to INR1,312m / £15.3m (FY17: INR1,691m / £19.3m) driven by cash preservation and cost saving initiatives
- Cash outflow from operating activities reduced by 50% to INR1,191m / £13.9m (FY17: INR2,233m / £25.5m) with reduced losses and improved working capital controls
* Explanation of metrics is provided in the trading performance and KPIs section within the Operating Review
Operational highlights:
- Significant progress in building brand and social base
o Brand awareness increased to 21% (FY17: 15%)
o Social media base increased by 400,000 followers to 2.4m with 1.9m on Facebook, generating three times the level of engagement compared to Koovs’ nearest competitor
o Won SAMMIE Award for ‘Best Social Media Brand in Fashion Apparel’ for leadership in using social media as an integral part of brand DNA - Maintained leadership position in customer experience
o Achieved highest customer Net Promoter Score amongst online fashion retailers in India (Redseer – Jan 2018)
o Ranked No 1 for “Best Customer Experience in Online Retailers” (Forrester Inc – Nov 2017)
o Voted “Favourite Fashion Portal” (Global Youth Forum)
o Named as one of Asia’s Most Trusted Brands by IBC Corporation USA - Delivered successful exclusive collaborations
o Designed exclusive capsule collections for Simply Be in the UK
o Launched design collaborations with international designers Gauri and Nainika and Danielle Helayel
o Launched social media fashion collaborations with Bollywood stars including Taapsee Pannu, Rhea Chakraborty, Adah Sharma, Ahaan Panday, Elli Avrram which together generated content with 7.4m user engagements
Post Balance Sheet event: funding successfully secured from HT Media and Future Lifestyle Fashions Limited
Since the year-end, and as previously disclosed to the market, £22.1m of additional funding has been raised, including £12m from Directors and investors, a £5.8m strategic investment from Future Lifestyle Fashions Ltd (“FLFL”), part of the Future Group – India’s largest retail group, and most recently a £4.3m media-for-equity deal from HT Media Limited (“HT Media”), one of India’s largest media companies and owner of the Hindustan Times.
Furthermore, FLFL has conditionally agreed to further increase its ownership of Koovs to 29.9%, requiring an additional £10m of investment, and HT Media has conditionally agreed to invest an additional £12.9m in media-for-equity over the next four years if required by the Company.
Combined, the funding will provide Koovs with c.£45m of working capital to deliver on the Company’s strategic initiatives to achieve scalable growth over the coming years.
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