India-focused clothing brand Koovs saw shares shares sink nearly 10 percent on Thursday, after disclosing a significant loss for the six months to September.
The loss for the period was £9.1 million after reinvesting in marketing and technology, despite raising £26.2 million of extra capital between April and September.
The site saw a strong increase in website traffic on the back of a social media drive, seeing an 132 percent increase in users. Sales growth also grew 114 percent to £7.9 million, up from £3.7 million on the year before. The brand now has a registered user base of 1.5 million.
The clothing brand, owned by Labour life peer Waheed Alli, said it had been negatively affected by the country’s demonetisation programme. Indian Prime Minister Narendra Modi took 500 and 1,000 rupee notes out of circulation last month without any prior warning, in an attempt to ease India’s massive cash economy and with it corruption.
The company’s CEO, Mary Turner, commented:
“It has been another amazing six months of growth for both sales and new customers. We have delivered on both our strategic and financial objectives and are in line with expectations. The increases in our customer base, registered base and social followers will provide an excellent opportunity for future growth. Whilst demonetisation had a short-term impact on the market and e-commerce we have seen good growth in November and had some of our best days for sales in December.
“The Indian online fashion market is projected to grow to £2.5 billion by 2020 and the combination of a strengthened management team, our exclusive London based designs and operational expertise in India, mean Koovs is well positioned to capture a significant market share in this rapidly growing market. ”
Koovs (LON:KOOV) shares are currently down 8.36 percent at 48.11 (1444GMT).