Koovs PLC Trading Update (1030U)

TIDMKOOV

RNS Number : 1030U

Koovs PLC

05 April 2016

For Release at 7am BST on 5 April 2016

Koovs plc

KOOVS reaches GBP10 million sales*, ahead of target,

and 1 million registered users

Announces new collaboration with London illustrator Hattie Stewart for autumn,

and launch this week of 6(th) designer collection with Manish Arora

Trading update for the financial year to 31 March 2016

Koovs plc ("Koovs", the "Company" and, together with its subsidiary undertakings, the "Group") (AIM: KOOV), the fashion-forward business focused on the young Indian e-commerce market, today announces a trading update for the financial year to 31 March 2016.

Financial and operational highlights

   --     Annual sales* growth to INR981m (GBP10.0m), a 189% increase year on year. 

-- 110% increase in website visits year on year, with weekly traffic now consistently exceeding one million visits per week.

   --      55% increase in conversion rate year on year. 
   --      Registered users now 1 million, an increase of 226% over the year. 

Koovs' business plan and strategy continues to deliver growth in sales, brand awareness and traffic to the web site, with visits now regularly exceeding 1 million each week. Sales* in the year to March 2016 reached INR 981m (GBP10m), an increase of 189% on the previous year. Web site traffic has increased by 110% and conversion by 55%, resulting in more than a threefold increase in the number of orders shipped.

The company also continues to grow its product range with new categories launched (denim and basics) and designer collaborations from global names such as Pankaj & Nidhi, Henry Holland, Giles Deacon, Mawi, Nikhil Chinapa and Manish Arora.

Mary Turner, CEO of Koovs plc, says:

"The business has achieved strong growth in volumes, ahead of our target for the year. Our focus is to bring affordable western fashion to the growing urban, aspirational, youth movement in India - a market which represents 75% of all online transactions across India. We are delighted to announce our new exclusive, design collaboration with Hattie Stewart, one of the most interesting designers coming out of London right now. Her fresh and playful style correlates exactly with our target market and we think our customers will love her."

Hattie Stewart, London illustrator, says:

"It is incredibly exciting to be working with such a young, energetic and growing company like Koovs. They have vibrant and fun-loving customers and it's so exciting to see London designs hitting the streets of India."

Market opportunity & business strategy

The opportunity and exceptional growth of the ecommerce market in India provides the foundation for Koovs' ongoing business strategy. According to Morgan Stanley, online shopping options in India are growing rapidly and while the market share of first-phase ecommerce market players has dropped from 91% to 83%, new niche companies have grown market share from 2% to 7%.

Technopak, India's leading consultancy firm, has produced a report on the opportunity for lifestyle and fashion ecommerce in India, which has the world's fastest growing economy (7.5% GDP growth in 2015), ahead of China (6.3%).

The report highlights that the median age of India's population is 27, compared to 40 in the UK, and that the IMF has forecast that an additional 250m people will join the workforce in India by 2030. Combined with a move towards urbanisation and the focus of consumer spending in mega-cities and super-regions, this provides the perfect environment for ecommerce success.

In addition, the limited reach of organised retail means the potential for ecommerce is significant. Unlike more mature markets, ecommerce retail is largely new growth and new revenue rather than replacement for traditional bricks and mortar.

The report concludes that "the private label led space, where fashion becomes a lifestyle choice, 'editorialised' and curated by the retailer to meet the customer's style needs, now presents a real 'sweet spot' in the market. The new challenge, as the ecommerce market becomes more sophisticated, is not to be a generalist in trying to address all of the ecommerce market, but to own a category, dominate a specific need/niche and remain relevant for the target customer."

Fashion leadership

New Koovs collaboration with Hattie Stewart. Manish Arora menswear launches.

Koovs also continues to demonstrate its credentials as a high fashion destination with the announcement of a new collaboration with London illustrator and graphic designer Hattie Stewart and the launch of a sixth collaboration menswear collection with Paris-based high fashion designer Manish Arora. These new collaborations build on successful collections from Henry Holland, Giles Deacon, Pankaj & Nidhi, Nikhil Chinapa and Mawi.

Hattie Stewart, a graphic designer/illustrator and favourite of the art and fashion world, is collaborating with Koovs to create a new collection for autumn 2016. Uniquely, Hattie's graphics will be incorporated into exclusive new fabric designs. Hattie's cheeky and fresh work, characterised as 'doodle bombs', has been exhibited in London, New York, Berlin and Miami, taken over the covers of a number of fashion magazines and won her commissions from catwalk designers Marc Jacobs and Henry Holland, as well as brands such as Mac, Adidas and Diesel. Hattie Stewart's approach is: "What's the point of creating something if you don't love it?"

At the same time, Koovs' sixth collaboration collection goes live with celebrated Paris-based designer Manish Arora. Again this is a unique partnership as Arora, a global womenswear designer, has created his first menswear collection Indian by Manish Arora X KOOVS launching this week.

Capital raising

As previously announced, the Company has plans to raise additional capital to invest in the growth of the business, which remain on track.

Waheed Alli, Chairman of Koovs plc, says:

"The market in India offers a great opportunity for private label and curated western fashion. Continued focus on the company's core strategy and business plan is delivering significant growth not only in sales but also web traffic and conversion rates, so we are delighted."

Key Performance Indicators

 
                  Year ended     Year ended    Growth    Year ended      Year ended 
                     March          March                   March           March 
                     2016           2015                     2016            2015 
                                                        Memorandum(^)   Memorandum(^) 
 Koovs.com            INR 981        INR 340    +189%        GBP10.0m         GBP3.4m 
  sales*                    m              m 
 Visits to 
  the website    43.8 million   20.9 million    +110% 
 Conversion              1.5%          0.97%     +55% 
                                                       --------------  -------------- 
 

* Gross sales order value placed through the KOOVS.COM website including taxes. This does not represent the revenue of the Group.

^ Sterling equivalent at constant exchange rate of INR98.57 to GBP1.

Notes to Editors

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. The marketing campaign video can be seen at www.youtube.com/koovsdotcom

 
 For further information, 
  please contact: 
 Koovs plc                   Tel: [phone] 
  Mary Turner/Roy Naismith 
 Peel Hunt LLP 
 Dan Webster / George        Tel: [phone] 
  Sellar                      8900 
  Jock Maxwell Macdonald 
  (ECM) 
 Brunswick Group LLP 
 Nick Claydon / Alison       Tel: [phone] 
  Kay                         5959 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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April 05, 2016 02:00 ET (06:00 GMT)