Monday, May 27

Myntra’s losses reduced by 25%, Aims to Track Profits for FY18

Myntra’s marketing strategies and intelligence have lately given a boost to the fashion and lifestyle business of its parent company Flipkart. The losses for the FY17 have reduced by 25% to Rs. 655 crore as against Rs. 823 crore in the previous year.

The major strategy adopted by the fashion and lifestyle etailer has been the focus on umbrella branding of its private labels, which means the ability of a single brand to reach across categories. The increase in the reach of private brands to the masses led to the decrease in losses for the company.

The documents show that the losses presently stand at Rs 627 crore, lessening 23% on a standalone basis. The company’s three-year-old private label business has grown tremendously and accounts for about 25% of the overall revenue. In September 2017, the CEO of the firm named Ananth Narayanan mention that the private label business that includes brands like Roadster, Dressberry, Anouk, and HRX have helped in bringing up the profits of the company.

A statement in the Financial Documents claimed, “With a view to realign the business model of the company and to focus on its technology business of operating and maintaining the… marketplace platform, the board of directors… have accorded their approval towards a slump sale of the company’s wholesale B2B trading business, together with all the assets and liabilities attributable to such business, on a going and ‘as is where is’ basis to M/s Myntra Jabong India Private Limited (MJIPL).”

Though Flipkart-owned Myntra has been successful in reducing the losses and doubling the profits, it still needs to take measures regarding the costs which stands as an obstacle. Advertising expenses alone grew almost 59% to Rs 289 crore, burdening the total expenses for Myntra this year, which was higher by 41% at Rs 2,667 crore. This reduction in losses comes even as Myntra Designs, the main entity that runs Myntra’s marketplace, showed a gigantic 94% increase in FY17 revenues at Rs 2,000 crore from Rs 1,031 crore last year.

It seems now the fashion and lifestyle etailer is on the path of profits and is sure to show way more decrease in the losses through its valuable and intelligent marketing techniques and strategies.