Indian demonetisation hurts Koovs as losses widen

In its preliminary results for the year ended 31 March, Koovs said the 78.5m visitors to its website during 2017 spent £18.6m, boosting revenue 49% to £8.7m and dragging trading margins from -6% to +4%.

Pre-tax losses widened to £19.3m from the £16.7m it posted a year earlier as the retailer invested in hyper-targeted marketing campaigns that brought about a 15% increase in brand awareness and took its social media audience to more than 2m people.

Mary Turner, Koovs chief executive, said: "We are pleased to have delivered strong sales growth, significantly outperforming India's e-commerce market by over five times during the challenging period of demonetisation, which affected the whole economy in India."

Koovs said it implemented a "rapid response and proactive approach to mitigate the initial impact of demonetisation," which was introduced with next to no warning in November, but its response was not enough, as the hit to both online and traditional retailers couldn't stop the "high levels of discounting, creating a gross margin loss."

Despite challenges to the economy in India and the UK, the company managed to grow 100% in terms of both units shipped and repeat customers as it delivered growth over five times greater than that of the broader Indian e-commerce market.

With the online market for western fashion forecast to expand to $3.5bn by 2020, along with India's digitally connected, aspirational middle class, the company said it was "extremely well positioned" to benefit from the momentum.

A loss per share of 12.8p was reported and cash and equivalents rose from £1.98m to £2.47m.

As of 1435 BST, shares had dropped 14.63% to 35.00p.