India-focused fashion website Koovs' (KOOV:AIM) positive year-end update flags 189% annual top-line growth to £10 million, a milestone reached ahead of target that sends the shares surging 27% higher to 21.75p. The £7.7 million cap's strategy is driving top-line growth, brand awareness and web site traffic, though as flagged in January, the company still requires a further capital injection.
Click here for an in-depth look at the update from Koovs, the 'fashion-forward' retailer offering a play on the explosive growth on offer in the young Indian e-commerce market. In the financial year to March, annual sales rocketed higher to the equivalent of £10 million. New CEO Mary Turner also reports a 110% increase in website visits year-on-year and says weekly traffic now consistently exceeds one million visits per week.
News of the need for funding to further its growth ambitions has lately weighed on the share price of London-headquartered Koovs, though investors clearly like the micro cap's dramatically improving growth metrics. Turner also highlights a 55% hike in the sales conversion rate, which drove the number of orders shipped up more than threefold last year.
'The business has achieved strong growth in volumes, ahead of our target for the year,' says Turner. 'Our focus is to bring affordable western fashion to the growing urban, aspirational, youth movement in India - a market which represents 75% of all online transactions across India', now the world's fastest growing economy by the way.
Koovs operates in a market with vast growth potential and where e-tailing is in its infancy. According to a report into India's lifestyle and fashion e-commerce opportunity from local consultancy firm Technopak, the median age of India's population is just 27, compared to 40 in the UK. Meanwhile the IMF has forecast that by 2030, an additional 250 million people will join the workforce in India, where urbanisation is occurring rapidly.
Also exciting investors is the continued growth in the Koovs product range and a growing roster of designer collaborations with the likes of Henry Holland, Giles Deacon and Paris-based Manish Arora. Today, Koovs announces a new and exclusive design collaboration with London illustrator and graphic designer Hattie Stewart, something of a darling of the art and fashion world, who is collaborating with Koovs on a new autumn 2016 collection.
Koovs says its plans to raise £4.5 million through a dilutive new share issue remain on track. Once this capital raising completes, and building on the £1.1 million put in by directors in October, Koovs will have raised £5.6 million for investment in beefing up its marketing push, broadening the product range and to fund working capital, as it continues on its rapid growth trajectory.
