Pepperfry FY18 loss shrinks on higher revenue, lower costs

Furniture e-tailer Pepperfry reported a narrower loss for the financial year 2017-18 as it increased its revenue 20% and cut costs.

Pepperfry, operated by Mumbai-based TrendSutra Platform Services Pvt. Ltd, said in a statement consolidated revenue rose to Rs 309 crore for the year through March from Rs 258 crore the preceding year.

Consolidated net loss shrank to Rs 169 crore from Rs 249 crore, helped by a 13% reduction in expenses to Rs 453 crore.

The consolidated figures include audited financials of TrendSutra Platform, TrendSutra Client Services Pvt. Ltd and Pepcart Logistics Pvt. Ltd after intercompany eliminations.

The company said it enhanced efficiency through supply chain automation, high vehicle utilisation, improved delivery rates and staff productivity. It also cut overhead costs by 17%.

Co-founder and chief executive Ambareesh Murthy told TechCircle the company managed to shrink the loss despite furniture attracting a 28% goods and service tax. The GST was rolled out nationwide in July 2017. The tax on furniture was reduced to 18% in November last year.

Murthy said sales had grown after the tax cut. He also said the company will expand its portfolio by becoming a full-stack home furnishing company and explore international markets.

Founded in January 2012 by Murty and Ashish Shah, Pepperfry started off with categories such as home, lifestyle and fashion products. It now specialises in furniture and home products.

In March, the company raised Rs 250 crore ($38.4 million) in a fresh round of funding from asset management company State Street Global Advisors. It has raised a total of around Rs 1,200 crore ($180 million) in capital since it began operations.

Pepperfry has been expanding its offline outlets called Pepperfry Studios. The company has around 38 outlets in 18 cities and will close the current financial year with around 50 stores. It had recently started a franchise model for its offline stores.

Pepperfry runs on a curated marketplace model with around 10,000 sellers. Its private label brands sell around 55% of the products on its platform.

Pepperfry's biggest competitor is Urban Ladder Home Décor Solutions Pvt. Ltd. Bengaluru-based Urban Ladder hasn’t yet disclosed its financials for 2017-18.

For the year through March 2017, Urban Ladder reported a 70% jump in consolidated net sales to Rs 95 crore. Its consolidated net loss narrowed to Rs 156 crore from Rs 182 crore.