Koovs seems to be in fashion as sales double despite uncertainty

Koovs seems to be in fashion as sales double despite uncertainty

Western fashion experts for online Indian consumers Koovs plc (LON: KOOVS) boasted impressive fundamentals during the second quarter, despite the ongoing uncertainty surrounding Future Lifestyle Fashions Limited’s investment into the company.

The Group’s headline figure was its 100% year-on-year gross order value growth, from £2.5 million to £5.0 million.

This was bolstered by additional progress in its trading margin, which increased from 7% to 12% on-year, a 69% spike in website traffic which was up to 27.3 million visits, and conversion rates rising from 1.1% to 1.3%.

The Company said that the latest round of results represents the third consecutive quarter of growth in its core performance metrics, and indicates the strength of Koovs’ underlying business model.

FLFL subscription and near-term strategy

The Company’s statement read,

As announced on 21 October 2019, Koovs was informed by Future Lifestyle Fashions Limited (“FLFL”) that the Reserve Bank of India (the “RBI”) now requires FLFL to reapply for approval prior to completing its outstanding £6.5 million investment into Koovs. FLFL has confirmed to the Company that it is in the process of reapplying for this approval and has confirmed its commitment to honour its investment into Koovs, whether through the existing mechanism (through the issue of compulsory convertible preference shares) or, to the extent available, an alternative route should the approval not be forthcoming.”  

“The Company is working with FLFL to secure the committed investment, alongside considering other fundraising options available to the Company, in the event the RBI approval process is not completed within the coming weeks.”

“The Board has also determined to implement certain cash conservation measures, primarily in relation to reducing stock purchases and marketing spend, with the intention of ensuring there is the maximum time available for the various options available to the Company to be considered.”

Investor notes

Despite the positive sales figures, the FLFL uncertainty weighed on the Company’s progress during trading today. The Group’s share price dipped 3.04% or 0.092p to 2.93p per share 29/10/19 15:43 GMT. Neither a p/e ratio nor a dividend yield are available for Koovs stock, the Company’s market cap is £11.25 million.

Elsewhere in fashion, there have been updates from; Superdry (LON: SDRY) N Brown Group plc (LON: BWNG), Boohoo Group PLC (LON: BOO), Burberry Group plc (LON: BRBY), H&M (STO: HM-B) and Sports Direct International Plc (LON: SPD).