Koovs PLC Trading update (3711L)

TIDMKOOV

RNS Number : 3711L

Koovs PLC

11 January 2016

For Release at 7am on 11 January 2016

Koovs plc

KOOVS achieves sales* growth of 210% supported by new brand marketing campaign

Trading update for 14 weeks to 3 January 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 period from 28 September 2015 to 3 January 2016.

Financial and operational highlights

   --      210% sales* growth to INR295.6m (GBP2.96m). 

-- First phase of brand-focused, multi-channel marketing campaign, from 23 November 2015 to 31 December 2015, increased brand awareness from 1% to 8% (according to Campaign Watch from mConsult).

   --      98% increase in website visits and 75% increase in conversion rates year on year. 

-- Weekly traffic exceeded one million visits per week for the first time; a 40% increase from the start of the marketing campaign.

Management and strategy update

Mary Turner, appointed CEO on 1 October 2015, has made a considerable impact in her first 90 days in the role, refocusing the commercial strategy into three immediate priorities; to deliver a step-change in brand awareness, to extend the product ranges to appeal to a wider audience, and to develop a compelling fashion discovery platform with lifestyle content and social media engagement.

She has already initiated the first phase of a major brand awareness campaign, with very encouraging results, and appointed Gaurav Nabh (formerly CEO of Quasar, WPP's specialist digital agency in India) as Marketing Director to drive the on-going marketing strategy. Gaurav brings over 14 years of marketing experience including responsibility for launching Virgin Mobile and Telenor in India and has worked with top international brands such as Proctor & Gamble, Nestlé, Colgate and Domino's Pizza on their digital launches in the market.

In addition, as part of an overall business review, she has rebalanced the Group's international talent, refocusing the London team on creative and design and strengthening the execution capability in India.

Business strategy

Koovs.com is an online fashion destination for aspirational, fashion-conscious, tech-savvy, social and affluent young urbanites in India. Koovs blends its own-label brand with 150 famous international fashion brands and exclusive style collaborations. Koovs.com is building an online community, incorporating strong style content, enabling its target customers to interact and have conversations about fashion.

The Indian e-commerce market is undergoing exceptional growth. The lifestyle e-commerce market is estimated to increase by 5-times to GBP7.5bn by 2020, driven by the rise of the internet-connected middle class in key urban centres. Koovs' strategy is to access this growth market and to build Koovs.com into India's number one affordable western fashion destination by 2020.

The directors believe that what stands the Group apart is its exclusive private label designed in Koovs' own London studio, focused on the style conscious youth market, and its authority on international fashion, established through years of management experience working in global fashion markets.

In order to achieve the Company's vision and capture market share, management are focused on:

-- investing in the Koovs brand, amplifying it using a blend of high profile multi-media activities and innovative customer activations through music and fashion events;

-- growing the product range to extend and broaden into new categories and develop a 'basics' range to underpin the trend ranges; and

   --      creating a distinct and compelling online fashion destination. 

Investment in the brand

Koovs has established a core following of early adopters, however brand awareness across the total Indian market has been low. The directors believe this creates a significant opportunity for the Group to increase sales by raising brand awareness and reaching a wider target audience.

Koovs is implementing a targeted marketing campaign that spans a broad range of media, including a new focus on off-line media such as print, television, cinema and outdoor displays, as well as through activation activities such as participation in music and fashion events. This will be supported by a continuation of the on-line marketing including i-video and social media.

The initial campaign was launched in November 2015 resulting in a significant increase in brand awareness and strong sales* growth. It will be followed-up by further campaigns for the spring and autumn of 2016.

Product range

Koovs currently leads on trend-led fashion. By broadening the product offering into new categories including casual wear, active wear and work wear, along with an entry-priced fashion basics range, Koovs expects to widen its appeal to a broader customer base.

Fashion destination

Koovs.com aims to engage with customers and embed Koovs into their lifestyle by providing an engaging experience through fashion and lifestyle-related content and a seamless experience across the web, mobile and tablet. The "Style Stories" hub offers fashion inspiration, style news and the ability to interact and share.

Capital raising

The Company is in the final stages of agreeing another staged fundraising round of approximately GBP4 million. This will include further Director participation, underlining their confidence in the business strategy. This funding will allow the Company the flexibility to take a measured and strategic approach to the timing and terms of subsequent equity raises within the overall equity funding requirement. A further announcement will be made shortly.

Mary Turner, CEO of Koovs plc, said:

"We are very excited about the impact Koovs' first brand marketing campaign has had in raising our brand awareness from 1% to 8%. With highly targeted media and a standout creative, we have achieved impressive cut-through compared to brands with much higher spend profiles of 3-5 times ours.

"We have a clear strategy to build India's leading fashion destination, underpinned by clear financing and investment plans which are on track. Our priorities are to build on the positive momentum of our initial marketing campaign, further develop our product ranges and accelerate growth into the New Year."

Waheed Alli, Chairman of Koovs plc, said:

"The business continues to achieve spectacular growth, accelerated by the initiatives put in place by Mary during her first 90 days. Mary's background in fashion and technology start-ups has brought even greater focus to our business and her energy and drive are delivering strong results already. We are delighted to have her on board."

Key Performance Indicators

 
                   14 weeks        14 weeks      Growth     14 weeks        14 weeks 
                  to 3 January    to 3 January             to 3 January    to 3 January 
                      2016            2015                     2016            2015 
                                                          Memorandum(^)   Memorandum(^) 
 Koovs.com            INR295.6         INR95.5    +210%       GBP2,956k         GBP955k 
  sales*                     m               m 
 Visits to 
  the website     12.7 million     6.4 million     +98% 
 Conversion               1.4%            0.8%     +75% 
                                                         --------------  -------------- 
 

* 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 INR100 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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January 11, 2016 02:00 ET (07:00 GMT)