Indian etailer Koovs has warned that full-year sales will be struck by a fall in marketing spend, as it posted flat sales for the six months to 30 September.
Losses at the etailer reduced by 15% to £7.8m in the six months to the end of September, while gross sales stayed static at £7.9m, compared to the same period last year.
The company said it expects overall sales for its financial year to be hit by a drop in marketing spend, owing to “ongoing funding requirements”.
Koovs said marketing expenditure is “significantly” down as it addresses these financing issues. Additional spending is conditional on the timing of a funding programme announced in July, which it expects to close “shortly”.
As part of this funding round, it raised £8.9m out of a total possible £18.9m of convertible loan notes during the six-month period.
Koovs said 2017 has been a “challenging” year for the market, but expects to return to growth it its next financial year.
The company said its flat sales performance for the six-month period was in line with India’s overall ecommerce market performance, which has been impacted by demonetisation, the introduction of a tax on goods and services and heavy discounting and marketing expenditure by sector peers.
Trading margin year-on-year has improved to 18% from 2%, with brand awareness up by 21% from 15%. It also reduced operating costs by 9% to £7.7m.
Chief executive Mary Turner said: “It has been a challenging year generally for the market, however with these strong business fundamentals, Koovs is well positioned to capitalise further on the growth opportunity.”
The news comes after Koovs agreed a distribution deal with N Brown Group-owned SimplyBe in October.