Koovs : Preliminary Results for the year ended 31 March 2017 Click Here

On 14 August 2017, the shareholders approved the issue of up to £18.9m of convertible loan notes in order to provide funding for the Group's business plan, of which £8.9m has been secured to date.

"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.

"Our highly distinctive and targeted brand marketing has further established Koovs fashion authority among our core market of India's 18 to 34-year-olds.

"The focus for FY18 is to build on these foundations for sustainable growth towards profitability in FY20 and to further capitalise on the unique growth prospects of India's fashion e-commerce market, for the benefit of our shareholders."

Koovs is focused on building KOOVS.COM into the leading fashion destination in India. The Company is headquartered in London, where the majority of its design and buying team is based, with all other operational functions based in India.

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Dear Shareholders,

I am pleased to report that the financial year ended 31st March 2017 has been a year of significant growth and continued strategic progress towards our goals.

FY17 has delivered gross order value growth of 87% to INR1616 million (£18.6m) and a year-on-year increase of 100% in both units shipped and repeat customers. This growth is also underlined by a continued and consistent improvement in our gross margin position.

Importantly, we have delivered these strong results during a challenging period in the Indian market following demonetisation, announced on 8th November 2016. This impacted the whole Indian economy including e-commerce and Koovs rapid response and proactive approach to mitigate the initial impact of demonetisation, along with a strong Christmas trading period, has meant that the Company has been able to deliver growth significantly above (more than 5x) the Indian e-commerce market as a whole.

The market for online western fashion is forecast to grow rapidly to $3.5 billion by 2020 and with the continued growth of India's digitally connected, aspirational middle class, Koovs is extremely well positioned to benefit from this impetus.

In FY17 Koovs successfully raised capital of £39.1 million and added two new strategic investors, The Times of India Group and The Hindustan Times, two of the largest media Groups in India.

This funding has enabled Koovs to continue to build the brand efficiently through hyper-targeted marketing that is connecting and resonating with the young, urban and style-conscious customer and has established Koovs as the leading brand in its category for customer engagement across social media. Furthermore, our continued focus on customer operations has also delivered rewards, with Koovs now independently rated as number one for customer satisfaction in our sector (Redseer Net Promoter Score). In addition, we have completed the deployment of a new microservices technology platform which is spearheading our 'mobile first' strategy and is already providing innovative operational benefits, enabling the business to tap into new technology tools such as automated visual merchandising and promotions engine.

This has been a year of significant progress towards our objectives to increase our share of the youth fashion market in India from 4% to over 10% and to build Koovs into India's number one Western fashion destination by 2020.

I am extremely excited about the Group's prospects for the new financial year, remaining resolutely focused on our strategic objectives. We recognise that our growth must be sustainable, and have set targets for continued improvement in gross margin and a reduction in operational costs in FY18, leading to our goal of profitability and positive cash flow in FY20.

I would like to take this opportunity to thank all our colleagues in the UK and India for their continuing hard work, dedication and enthusiasm.

Waheed Alli Chairman

6 September 2017

India - the right place at the right time

With a 1.3bn population and 65% under the age of 35, India's demographics position is compelling.

A growing middle class with spending power and the increasing concentration in urban areas are fuelling a forecast growth in GDP of 6-7% a year.

India is undergoing a digital transformation with $3bn government investment in fibre and $32bn in 4G mobile networks. In addition, the $16bn Digital India programme will transform the economy, with the aim to create a digital identity for every citizen.

India is also adopting technology at a significant pace with 385 million people connected on broadband and over 250 million smartphone users in 2016 and predicted to rise by 40% and 60% respectively by 2020.

With this as a backdrop, e-commerce, lifestyle and online western fashion are sectors that are gathering significant pace with e-tail forecast to grow 300% to $60bn by 2020, online Lifestyle up 400% to $15bn and Online Western Fashion up 500% to $3bn in the same time frame.

For KOOVS customers this means providing affordable and aspirational, design-led online western fashion, curated for the style-conscious 18-34 Indian customer from an authentic fashion authority they respect, with extensive credentials in the western and global fashion markets.

KOOVS strategy is focused on four pillars to achieve scalable growth. During FY17 we have already attained significant milestones against these objectives:

• 40% of sales is currently Koovs Private Label and together with selected edits from famous brands

  that are exclusive to Koovs, 70% of lines are now unique to Koovs across site.

• Koovs continues to demonstrate our fashion credentials and leadership with high-profile designer collaborations. Four exclusive collections were launched during FY17 with Manish Arora, Hattie Stewart, Gauri & Nainika and Masaba. These highly successful, standout collections have further amplified Koovs clear position as the affordable fashion authority in India.

  Engage Content

• Content browsing sessions are 25% more likely to convert to sales, and KOOVS.COM now generates

  approximately 1.5 million content browsing sessions a year. Our exclusive reports from the top fashion catwalks, street style picks from key cities and global events, how to wear videos, celebrity 'in the style of' guides and user generated content, have established Koovs as the leading brand in our peer group for social customer engagement with over two million followers and over one million logging in to participate in a single campaign.

• Investment in the customer experience and care means Koovs is now rated No.1 for customer satisfaction in our peer group, with the leading average Net Promoter Score in our category (RedSeer).

  Amplify Brand

• Koovs brand awareness among its core 18 to 34-year-olds in India has increased from less than 1%.

  in 2015 to 15% in FY17. In March 2017 phase three of the 'Step Into Koovs' brand campaign commenced, lifting web traffic by 50% and peaking for the first time at two million in a single week.

• KOOVS.COM was also named 'The Most Popular Fashion Portal with Youth' by the Global Youth Marketing Forum in February 2017

• Koovs now has over two million social followers, including 400,000 on Instagram and industry-leading

  engagement of more than 3x the nearest competitor in our category. We are innovating and leading in the use of social media, such as Koovs pioneering use of platforms like Facebook Live.

  Extend Territories

  • Our focus remains on the considerable growth opportunity in our home market India. However, we

have identified a number of territories with significant growth potential and these include the Middle East and Asia-Pacific. Koovs will be piloting projects to cost-effectively enter these markets leveraging local partners and expertise. The first international distribution agreement is with Amazon-owned SOUQ.com to launch the Koovs Private Label Collection in the Middle East during the Summer 2017.

Koovs provides affordable, design-led and exclusive western fashion for the young, aspirational, style- conscious Indian consumer. Underpinning this product promise is our fashion authority and depth of experience in the design and buying team gained from world famous fashion brands such as Topshop, Asos, River Island, Miss Selfridge, Puma, Arcadia, Tommy Hilfiger and Misguided.

Our product architecture is a successful blend of 40% Koovs Private Label and 60% brands and we are now achieving intake margins of 54% and 46% respectively. Our strategy is to continue to improve intake margins, with targets to reach 70% for Private Label and 50% on brands.

Koovs target youth market in India is technology savvy and avid smartphone users - living life on the go. Over 75% of Koovs traffic and transactions are delivered via our app and mobile site, so delivering a Mobile First approach is a key cornerstone of our technology strategy.

Over the last 12 months, the Company has focused on rebuilding our technology platform, adopting the latest modular microservices architecture. The new platform, which has already delivered Koovs new high- performance App for iOS and Android, will enable the Company to deliver scalable performance, rapid technology development and innovation throughout the business, including fast, flexible and cost-effective operational tools such as Automated Visual Merchandising for product and a Promotions Engine for marketing.

As a Mobile First operation, Koovs has already integrated with the leading digital and m-commerce payment gateways, and new strategic technology milestones underway, including Augmented Reality, Voice Control and Automated Personalisation, are designed to improve customer engagement and conversion.

The business achieved strong growth during the financial year, supported by cost efficient marketing and improved operational efficiency.

Our overall aim is to increase our share of the youth fashion market from 4% to over 10% by 2020 and to do this we will continue to invest in strong, targeted and efficient marketing campaigns.

• Registered customer base is now up to 1.8m

• Total active customers (those who have purchased in the last 12 months) has increased to 0.5m

• Repeat customers and web traffic have both increased by c.100%.