Online fashion retailer Koovs said that it is looking to raise £18.9 million through convertible loan notes. The issue will be done in two tranches and the company says that it has:
- Subscriptions for £8.9 million from certain directors and investors right now.
- It will issue a further £7.5 million convertible notes and will secure subscriptions in due time.
- It added that it has to potential to secure up to a further £2.5 million.
Note that participation in the capital raising will be for invited subscribers only and members of the public are not eligible to take part in the issue.
The funds will be used for marketing, product expansion, build brand awareness, increase conversion, and fuel customer acquisition growth.
- Approximately £7.7 million investment will be used for brand marketing, social engagement, and market development.
- Around £1.1 million will be used for investment in product options and inventory.
Ads for equity deals
Koovs has ads-for-equity deals with both the Times of India Group and HT Media.
- In November 2016, Koovs issued shares to Brand Equity Treaties Limited, amounting to 4.39% in the company. This gave them a funding of £3.9 million and gave Koovs “access to multiple channels nationally across TV, print, radio, outdoor, online and digital.”
- Meanwhile, HT Media bought 8.31% stake for approximately $4.4 million. The strategic investment saw HT Media buying 12 million equity shares in Koovs.
Koovs aims to increase its product range each year and is aiming to release over 20,000 new options per year by 2020 from both its private label and third party-branded products. The private label collection currently accounts for 40% of Koovs products. This includes designer collaborations with Manish Arora, Hattie Stewart, Gauri & Nainika and Masaba. The current intake margin of Koovs’ private label products is approximately 54% and the company expects it to grow to approximately 70%.
Product architecture: The company also gave details on its product architecture.
- 60% of the products are design-led fashion i.e. designs inspired from the international stage
- 30% of the products are classified “must have” which adopt recent trends
- 10% of the products are classified as fashion basics.
User base and social presence: The company now has 1.8 million registered users, up 80% year on year, although registered users aren’t representative of active users. However, the total number of customers stood at 0.5 million (number of customers who have bought products from the website).
Koovs has approximately 1.7 million Facebook and 400,000 Instagram followers.
Website traffic: The website traffic for the year FY17 stood at 78.5 million unique visitors compared to 44.2 million in FY16.
Net promoter score: Currently, Koovs says it has net promoter score of approximately 25 to 35 depending on the timing of sale periods. For context, Flipkart and Amazon have a net promoter score of 95, as per this Mint report.
Orders: The value of orders taken on Koovs.com increased by 87% to £18.6 million for the year ended 31 March 2017. The number of orders stood at 1.2 million in FY17 compared to 0.7 million in FY16.