What The Financials
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Flipkart-owned online fashion marketplace Myntra saw its revenue slip nearly 6%, from INR 4,516 Cr in the fiscal year 2018-19 (FY19) to INR 4,262 Cr in FY20.
During the same period, the company saw a 9.59% decline in its total expenses, which came to INR 5,136 Cr in FY20. Hence, while still loss-making, Myntra has managed to cut its losses by 25% year-on-year (YoY), from INR 1,165 Cr in FY19 to INR 874 Cr for the fiscal year ending March 31, 2020.
In FY18, Myntra had recorded an 80% YoY fall in revenue. Its total income for that year was INR 427 Cr. In November 2018, Myntra and Jabong fully integrated their functions including technology, marketing, category, revenue, finance, and creative teams.
Myntra had acquired Jabong for $70 Mn in 2016 and merged operations. The data for FY20 mentioned above is from the filings of Myntra Jabong India Private Limited with the ministry of corporate affairs (MCA).
Among the company’s expenses, purchases of stock or goods in trade amounted to INR 4,360 Cr in FY20, a 10% decline compared to the previous fiscal year. Employee benefits expense increased by 26% to INR 322 Cr; finance costs increased by 121% to INR 208 Cr; and, other expenses, which includes the company’s spending on rent, fuel, transportation, advertising and legal services, increased 5.3% to INR 278 Cr.
It is worth noting that in FY19, Myntra Jabong India Pvt Ltd had seen a 236% YoY increase in losses, from INR 346 Cr in FY18 to INR 1,165 Cr in FY19. Hence, given that the company has been able to cut its losses by 25% in FY20 is a positive sign for the company. An earlier Inc42 report highlighted the significant increase in revenue for Myntra after Walmart acquired its parent company Flipkart in May 2018.
The company’s filings for FY20 also acknowledge the impact of the Covid-19 pandemic on ecommerce operations, likely to be reflected in the financial statements for FY21. This is because deliveries of non-essential products were barred through ecommerce portals in India for around two months, from late-March till late-May, when the countrywide lockdown was in place.
Myntra was founded by Mukesh Bansal, Ashutosh Lawania and Vineet Saxena in 2007. In 2014, the company was acquired by Flipkart at a deal value of INR 2K Cr ($290 Mn). Myntra partners with more than 2K fashion brands and lifestyle brands and services over 19K pin codes across the country.
Since last year, Myntra has been hyping up its omnichannel plans. The company had announced its intentions of launching 15 offline stores for its private label products. In June last year, it launched an offline store for Roadster. However, media reports at the time claimed that Myntra’s offline stores had run into losses, forcing closures of at least two stories, including the one for Roadster.
A company spokesperson had denied the news to Inc42, saying that offline stories will remain a key focus area for the company.