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Indian etailer Koovs sees pre-tax losses widen

Indian fashion etailer Koovs saw its pre-tax losses widen in the year to March 31, despite a substantial rise in sales.

The business reported a loss of 922.6 million Indian rupees (£9.4m) for the period, although sales increased 272% to 266 million rupees (£2.7m). 

It follows a pre-tax loss of 202.2m rupees (£2.3m) for Koovs’ first six months of trading to March 31 2014. 

It said profits were hit by higher than expected marketing costs in an Indian ecommerce market that is growing “at an unprecedented rate”.

Koovs said the spend was necessary to keep up with larger multi-category players, which have been “extremely active in the media”.

“We expect therefore to generate trading losses in the immediate future as volumes and gross margins improve with the development of the brand,” the company said.

During the period, the business welcomed former Asos director Mary Turner as its new chief executive. As reported earlier this year, Turner has been a non-executive director at Koovs since July 2014.

She joined former Asos product director Robert Bready, who joined Koovs as creative and retail director in 2013. 

In addition to its own label, Koovs sells a number of third-party brands including New Look, Lipsy and Warehouse. During the year, it also added Boohoo.com to its brand list.

The board is in the process of seeking significant funding to support the Aim-listed company, both in the short term and the longer term. It added that it expects to secure this by the end of 2015.

Koovs chairman and former non-executive director of Asos Waheed Alli said: “Looking to the future, we are determined to continue growing market share and see significant further opportunity ahead as we transform Koovs into the number one Western fashion destination in India.”

Readers' comments (4)

  • "...Koovs sees profits rise..."? Shurely shome mistake here? Should be "...Koovs sees sales rise..."

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  • Luke Todd

    Thanks for pointing out the mistake, Nick. The story has been updated.

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  • Cheers Luke, but the amended headline still doesn't make sense...And the main point is that Koovs has burnt through all its cash and the share price has collapsed...

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  • There is an on-line fashion war going on in India at the mo, it appears that Jabong may soon be the first casualty with Rocket International starting to loose patience with them and Snapdeal mulling a buy.The potential, (eventually !!!) is massive, so expect, losses and consolidation, he who dares wins or should i say he with the deepest pockets wins but they will have to be very deep as Amazon (another loss maker) is aggressively targeting this market and appears to have bottomless pockets where debt is concerned !

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