Urban Ladder loss widens to Rs181.3 crore in fiscal 2016
Bengaluru: Online furniture store Urban Ladder Home Décor Solutions Pvt. Ltd posted a threefold increase in losses for the year ended March 2016 on account of higher employee and advertising expenses, while revenue from operations increased about two-and-a-half times, according to documents filed with the Registrar of Companies (RoC).
Revenue from operations for the last fiscal year stood at Rs34.4 crore as against Rs13 crore in the previous fiscal, while losses surged to Rs181.3 crore last fiscal as against Rs58.5 crore a year ago, according to the documents.
Overall expenses ballooned almost three times to Rs231.3 crore from Rs77.7 crore in FY15. Advertising expenses, at Rs104.5 crore, accounted for about 45% of the expenses. It spent about two-and-a-half times more on advertisements last fiscal than the Rs40.3 crore in the year-ago period.
Employee costs increased to Rs58.4 crore in FY16 from Rs16.58 crore in FY15. The company declined to comment on its performance.
Urban Ladder is one of the most well-funded online furniture stores, having raised $77 million in equity funding from the likes of Sequoia Capital, Kalaari Capital, Steadview Capital, SAIF Partners and TR Capital, among others. This apart, it raised $3 million in venture debt from Trifecta Capital in June this year.
Urban Ladder competes with the likes of Goldman Sachs-backed Pepperfry (Trendsutra Platform Services Pvt. Ltd) and Bessemer Venture Partners and Jungle ventures-backed Livspace (Home Interior Design E-commerce Pvt. Ltd).
Pepperfry, the most well-funded homegrown online furniture start-up with $159 million, posted higher revenues and lower losses than Urban Ladder in FY16. According to documents available with the RoC, Pepperfry posted revenues of Rs98 crore last fiscal, a four-fold increase from Rs25 crore in the year-ago period, while losses stood at Rs154 crore, as against Rs80 crore in FY15.
In an attempt to revive sales, Urban Ladder has tied up with online marketplaces such as Flipkart Ltd and Amazon India in a move that will give it access to their large user base, a move that reflects on a slowdown in business, say experts.
Traditionally, Internet-only brands, especially in the fashion and jewellery segments, have partnered with larger online marketplaces which have higher traffic and bigger customer base. But, none of them are at Urban Ladder’s scale.
Urban Ladder has launched a new brand identity and plans to widen its offline distribution channels beyond company-owned centres and streamline product offerings as it aspires to evolve from an online furniture store into a brand, Mint reported on 26 October.
It plans to launch at least three experience centres over the next 8-12 months in Bengaluru, as well as explore large-format retail stores by setting up pop-up stalls. The firm also has its eyes set on local furniture stores, where it might take the assisted commerce route through kiosks displaying the Urban Ladder catalogue. It will also explore partnerships with paints and white goods appliances brands among others, which may involve cross-selling.
Co-founder and chief executive Ashish Goel told Mint in an interview in October that the company has trimmed the number of products sold on its platform from about 5,000 a year ago to about 4,000 and aims to prune the list further to about 3,000-3,500 units in the next 12 months, a move that he says will give the firm more bandwidth to focus on quality and customer service.