Koovs posts sales increase as FLFL deal stalls
today Oct 29, 2019
Koovs, a UK-based Indian e-tailer, is working with Future Lifestyle Fashions Limited, India’s largest retail group, to review their options and consider new fundraising routes after their deal hit the rocks last week.
The fashion platform said in a trading update that Future Lifestyle Fashions Limited (FLFL) has insisted it will honour its planned £6.5 million investment in Koovs.
It comes after the Reserve Bank of India requested on 18 October that FLFL reapply for approval before completing its outstanding investment. To date, FLFL has subscribed for just £0.25 million of the total £6.81 million in compulsorily convertible preference shares it had initial committed to.
The decision, still unexplained, essentially stalls an investment deal that would bind together two of India’s leading fashion retailers.
Koovs said FLFL is in the process of reapplying for this approval, but the company is also considering other fundraising options in the event the RBI approval process is not completed within the coming weeks.
As part of this, the online platform will reduce stock purchases and marketing spend to protect its cash position.
The update also detailed Koovs’ second quarter trading performance, revealing a 100% increase in gross order value (GOV) to £5 million.
Trading margin increased to 12% from 7% in the second quarter of the prior year, while website traffic surged by 69% to 27.3 million during the period.
The online retailer also reported improved conversion rates, standing at 1.3% compared to 1.1% in the second quarter of last year.
“The second quarter of the current financial year has seen a continuation of the strong growth in website traffic and GOV,” said the business.
“This represents the completion of three consecutive quarters of growth in our key performance metrics set out above and is a clear indication of the strength of the Koovs' underlying business model.”
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