Zivame narrows FY19 losses and targets more than 100 offline stores over two years
Actoserba Active Wholesale, the Bengaluru-based parent holding entity of online women-focused innerwear brand Zivame, narrowed its losses to Rs 19.56 crore for the financial year ended March, 2019, against Rs 32.11 crore in the previous financial year.
This is the second year in a row that the Zodius Capital-backed company has narrowed losses after it pushed through a business model pivot about four years ago that saw it transition into a private label business. Shortly after the pivot, Zivame founder Richa Kar stepped down as CEO of the company. Kar, a former SAP executive, founded the company in 2011.
Stronger sales during FY19 helped with the momentum, even as total expenses increased by 27% to Rs 160.02 crore, the company’s latest regulatory filings showed. Total revenue grew 51% to Rs 141.9 crore.
Finance costs at the company rose by 788% to Rs 1.42 crore, on the back of increased interest costs on borrowed capital. Employee benefits expenses increased by 5% to Rs 24.29 crore.
The company also announced its retail expansion plans to take its total offline store count to over 100 in the next 20-24 months. “We will deepen our presence in Tier 1 towns and focus on key Tier 2 and Tier 3 markets,” it said in a statement.
“Last one year has been phenomenal as we have strengthened our position across categories and deepened our presence in the markets. With tech, data and innovation at the heart of everything we do, we are set up for exponential growth over the next few years,” CEO Amisha Jain said.
The omnichannel platform forecasts its growth outlook at over 75% in the next few years. Mobile app contributions to the brand’s gross sales increased from 50% to 65%, year-over year. It claimed that Zivame currently sells 14 products a minute every day.
Recent media reports said that the company was in talks with investors to raise as much as $50 million (Rs 358.7 crore). The proposed deal is expected to value the company at $200 million (Rs 1434.86 crore). The capital will likely be used to fuel its offline expansion plans. In September this year, it received $2.7 million in what was likely a bridge funding round from existing investors Zodius and Avendus Capital.
In 2017, it had received a licence grant from the Indian government to enter an agreement to transfer the Zivame retail store business from Mila Star Retail. “With the opening of new retail stores for customers to have a first-hand look of the company’s products, we were able to receive positive response from the market, which will help in future growth of the business,” the company said in the regulatory filing.