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Myntra losses surge 38%, End of Reason Sale reportedly sees record traffic

Myntra losses surge 38%, End of Reason Sale reportedly sees record traffic
Photo Credit: Reuters
28 Dec, 2020

Ecommerce major Flipkart-owned Myntra Designs reported a 38% year-on-year increase in losses to Rs 744 crore for the financial year ended March 2020. 

For the same period, the fashion commerce platform’s revenue from operations stood at Rs 1,675 crore, up 60.9% from Rs 1,041 crore in FY19.  

Its total expenses for FY20, which included costs of raw material, inventories of finished goods, employee benefit expenses and other financial costs, stood at Rs 2,462 crore, compared to Rs 1,628 crore for the same period last year.

The consolidated financial statement said: “The group’s ability to continue as a going concern is dependent upon the success of operations and the group’s ability to arrange funding for its operations. Based on commitment and support from Flipkart Private Limited, Singapore, intermediate holding company to the company, management is confident of meeting its operating and capital funding requirements in future.”

Additionally, Myntra Jabong, a subsidiary of Singapore-based holding company FK Myntra Holdings, saw its revenue fall to Rs 4,248 crore in FY20 from Rs 4,464 crore in FY19. The company, which runs a wholesale cash-and-carry business and B2B trading of fashion merchandise for Myntra, trimmed its net loss for the reported period by 25.03% year-on-year to Rs 875 crore.

Flipkart, which shut down Jabong in February to renew its focus on Myntra, has been looking to pick up stakes in other fashion retailers.

It announced the intent to acquire a 7.8% stake in Aditya Birla Fashion Retail, which owns brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England, for Rs 1,500 crore. 

The company in November invested an undisclosed amount in Sachin Tendulkar and Virat Kohli-backed Universal Sportsbiz (USPL), which operates fashion brands Wrogn and Imara. 

In August, Myntra acquired a 100% stake in Deepika Padukone’s brand All About You.

Even as ecommerce sales grew amid the pandemic, Myntra reportedly witnessed a record-breaking 15 million visitors on the opening day of its End of Reason Sale (EORS) on December 20.

The fashion ecommerce platform, as per media reports, recorded a 110% increase in traffic on day one of the sale, compared to its business-as-usual period. It sold three million items of SKUs, primarily to shoppers from the tier 2 and 3 cities, including Jammu, Guwahati, Bhubaneswar, Kakinada, Dehradun and Imphal, the reports said.