Urban Ladder hands out pink slips amid efforts to turn profitable this year
Omnichannel furniture retailer Urban Ladder Home Décor Solutions Pvt. Ltd has laid off around 60 employees as part of a strategy to cut costs and turn profitable, a top executive told TechCircle.
Ashish Goel, co-founder and chief executive officer of Urban Ladder, said that the pink slips had been handed out across levels, functions and geographies. The move was geared towards Urban Ladder’s goal of achieving profitability between April and June and staying the course before launching an initial public offering (IPO) in 2021, he added.
“Over the last year our focus has been on becoming more robust and self-sustaining, while we continue to grow our business,” said Goel. “As part of these efforts, we are restructuring our business to become leaner and by extension to improve our business economics.”
After taking the pink slips into account, Urban Ladder’s pan-India headcount currently stands at around 750.
Business Standard, citing people it did not name, had earlier reported that Urban Ladder had asked 90 of its employees to leave and more layoffs were on the cards. However, a spokesperson for Urban Ladder told TechCircle that the company had no immediate plans to reduce its headcount.
The development comes months after Goel had said that Urban Ladder was targeting profitability by the end of this calendar year amid plans to go public in the financial year 2020-21.
Urban Ladder had reduced its operating losses by nearly three-fourths -- from Rs 457.96 crore to Rs 118.66 crore -- in 2017-18.
Total expenditure also declined by more than half to Rs 232.73 crore in 2017-18 from Rs 508.58 crore in 2016-17 amid a focus on reducing cash burn and offline expansion.
The company was founded in 2012 by Rajiv Srivatsa and Ashish Goel. It offers more than 5,000 furniture designs under a dozen broad categories that include living, bedroom, dining room, storage, study and decor among others.
Urban Ladder, which was until recently an online-first venture, has begun to expand its offline presence aggressively with the launch of six large-format stores in Bengaluru and Delhi-NCR. The move to ramp up its offline presence is in keeping with a wider perception that omnichannel might be the way forward for vertical e-commerce players in the furniture retailing space.
“Our focus for the next 12-18 months will be on expanding our omni-channel business in the remaining top cities, to make all cities grow and be profitable. We will be expanding to 12 more cities on omni-channel retail and concentrate on marketing, operations efforts on those top new cities (in addition to Bengaluru and Delhi),” Goel told TechCircle.
Goel had recently told The Economic Times that offline stores account for around one-third of the company’s overall revenue.
In 2017, it secured a licence to become a single-brand retail firm after the government allowed 100% foreign direct investment in the segment.
Urban Ladder is among the significantly funded players in the furniture retailing space having raised a total of nearly $110 million through a mix of equity and debt. Its investors include Ratan Tata, Steadview Capital, SAIF Partners, Kalaari Capital and Sequoia Capital.
Its most recent funding round took place last September, when it raised $5.06 million from venture debt firm Trifecta Capital, six months after the furniture e-tailer had raised $11.83 million from existing investors.