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Indian fashion retailer Koovs’ stock tumbles on London bourse after poor trading outlook

By Angela Gonzalez-Rodriguez

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Shares at Koovs PLC (LON:KOOV) tumbled Tuesday after the Indian online fashion retailer said it expects full-year sales to be hit by lower marketing spend as it addresses ongoing funding requirements.

On the back of the update, the company’s shares dropped 40.28 percent to 16.12 pence in morning trading.

The company said marketing expenditure is "significantly down" at the moment and additional spend will depend on the timing of the closure of its funding programme announced in July, which is expected to close "shortly".

In fact, reduced marketing spend saw the pre-tax loss for the six months to 30 September narrow to 37.7 million from 9.1 million last year. However, revenue fell to 3.9 million from 4. Million a year ago, highlighted ‘ProcativeInvestors’.

Gross sales from the website was flat at 7.9 million pounds, reflecting demonetisation in India, the introduction of a goods and services tax, and heavy discounting by rivals.

Koovs said the quality of its sales improved with markdown sales falling to 20 percent of sales from 29 percent, helping to boost margins. The trading margin jumped to 18 percent from 2 percent and gross margins improved from a decline of 20 percent to 0 percent.

Chief executive Mary Turner said it had been a “challenging year generally for the market" but Koovs is well positioned to return to growth in the next financial year.

Koovs