Furniture retailer Pepperfry Ltd posted a net loss of Rs 194 crore for FY22 compared to a loss of Rs 106.2 crore recorded in the preceding year. The company’s topline showed a rise of 23%, to Rs 247 crore versus Rs 201.5 crore in FY21.
The furniture retailer saw a significant expansion of its operational loss as its Ebitda (earnings before interest, taxation, depreciation and amortization) loss increased to Rs 121.2 crore in FY22 against Rs 39.6 crore in FY21. The retailer has reported its operational figures excluding Esop (employee stock options) costs.
The company’s Ebitda loss has increased owing to a sharp rise in expenses for the fiscal year ended March 2022. Total expenses for the period rose 40% to Rs 458.1 crore versus Rs 327.5 crore recorded in FY21.
This can be primarily attributed to a 79% rise in marketing and brand spending that rose to Rs 129.9 crore from Rs 72.6 crore in the previous year. “We invested behind marketing and brand particularly in H2FY22 to accelerate growth as markets opened post the second wave, to re-base the business and drive traction. The focus behind expanding to tier II & III cities resulted in the Pepperfry Studio network doubling to reach over 140 studios by March 2022,” the furniture player said in the statement.
Secondly, Pepperfry reported an increase in its employee benefits expense (ex-Esop) to Rs 71.3 crore versus Rs 45.5 crore. Esop costs, however, fell 42% to Rs 9.6 crore against Rs 16.6 crore.
Logistics and finance costs also rose 20% and 22%, to Rs 92.9 crore and Rs 23.5 crore, respectively.
“In supply chain, Pepperfry invested behind setting up 7 new distribution centres. The net promoter score was maintained at 73 and delivery timelines were reduced to less than 10 days across India,” the statement added.
Pepperfry said that the gross merchandise value (GMV) on the platform was up 33% year-on-year to Rs 1,185 crore. “Customers who visit Pepperfry Studios now account for 36% of the company's business. The growth in studio also resulted in an increase in the share of higher-margin D2C private labels, which reached 41% of GMV in FY22,” Pepperfry said in a statement.
Founded by Ashish Shah and Ambareesh Murty, Pepperfry sells furniture and home goods both online and offline. The venture is backed by Norwest Venture Partners, Goldman Sachs, Bertelsmann India Investments, and State Street Global Advisors. So far, the company has raised $240 million since its inception in 2012.
Commenting on the FY22 results, Ambareesh Murthy, co-founder and chief executive officer of Pepperfry said, “With the worst of Covid behind us in the latter half of FY22, we invested in our brand and supply chain, expanded our leadership team and seeded new business segments such as mattresses and modular furniture. These investments have set us up well to drive the next phase of growth.”
The company has recently appointed OnMobile chief Sanjay Baweja and Stonesoup.in co-founder Malini Parmar as independent directors on its board.