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Physical retail footprint continues to expand further, says Nykaa

By Retail4Growth Bureau | February 07, 2024

The brand, which announced its financial results for the quarter ended December 31, 2023, says its physical retail footprint continues to expand with 39 new stores launched over the last 4 quarters, totalling 174 stores as of December 31, 2023.

Nyakaa logo

Nykaa (FSN E-Commerce) has announced its financial results for the quarter ended December 31, 2023, which shows strong growth in consolidated GMV (Gross Merchandise Value) at 29% YoY; continuous improvement in profitability with EBITDA growth of 26% YoY and PAT growth of 106% YoY. The company also shared that its consolidated revenue from operations continues to grow at a strong pace of 22% YoY, totalling ₹ 17,888 million for the quarter.

The company says its physical retail footprint continues to expand with 39 new stores launched over the last 4 quarters, totalling 174 stores as of December 31, 2023. “The retail business now contributes to over 9% of the overall BPC GMV while also continuing to improve profitability. This is reflected in EBITDA improvement of 35% YoY. Our retail stores are critical to omnichannel strategy of premium brands. 85+ premium brands are present across our store network and contribute over 2/3rd to our offline GMV,” says the company statement.

It adds that the company owned brands in beauty experienced a strong GMV and NSV growth of 40% YoY and 36% YoY respectively and that its fashion GMV witnessed a strong growth of 40% YoY led by strong growth across all metrics. “Our fashion business is showing consistent improvement in profitability reflecting our platform strength and quality of our customersContribution margin as a % to NSV for Nykaa Fashion improved by 510 bps and stood at 6.0% in Q3 FY2024 vs 0.9% in Q3 FY2023. This was supported by strong improvement in our marketing expenses, down to 23.9% vs 28.6% a year ago.”

Others/New Businesses

  • New businesses at Nykaa, which include our distribution business, (which primarily constitutes Superstore by Nykaa), Nykaa Man, International, content led platform LBB and our wellness brand Nudge, continues to further our BPC industry reach. New Businesses NSV of ₹1,309 million at Q3FY2024, is now a meaningful share of business.
  • The distribution business continues to grow exponentially, with NSV growth of 88% YoY during Q3 FY2024. Within 2 years of launch, Superstore scaled up over 31x on GMV and now serves almost 1.5 Lakhs transacting retailers across 950 cities as on December 31, 2023.
  • The distribution business has achieved scale with improving profitability with contribution margin as a % to NSV improving 766 bps YoY. This is supported by several initiatives which led to improvement in pre delivery leakages, optimization of fulfilment and selling & distribution expenses.

Pink Friday Sale

  • This year our annual flagship sale “Pink Friday Sale” was hosted in Nov 2023 across our online platforms – Beauty, Fashion & Man as well as our offline stores. This unified sale across platforms has brought in record numbers this year, with about 50 million unique visitors across our platforms and stores in 10 days.
  • Beauty: Being India’s largest beauty sale, the beauty numbers have witnessed exponential growth scaling 10x over the last 5 years. The rise of disposable incomes driving premiumization is evidenced strongly by the demand for luxury products witnessed during this Pink Friday. Premium and Luxury brands outperformed contributing 1/3rd to overall GMV and growing at 32% YoY.
  • Retail Stores: The growing love for Pink Friday Sale led to 50% increase in footfall compared to regular days. With higher conversions, the GMV grew even faster than footfalls, witnessing 67% YoY growth.
  • Fashion: “Pink Friday Sale” for fashion has scaled significantly with 5x GMV growth over last 2 years and has grown over 85% YoY. This was driven by strong improvement in order conversion along with Women’s western wear and bag and footwear category outperforming, with GMV growth of 120%+ and 150%+ YoY respectively.

Other announcements

The Company’s board has approved group business restructuring initiatives towards bringing operational synergies by streamlining business operations across entities.

  • Further investment by the Company in Nykaa Fashion Limited by way of rights issue: FSN E-Commerce Ventures Limited is infusing additional equity into Nykaa Fashion Limited to be utilised for repayment of loans given by the Company.
  • Acquisition of Lingerie & Athleisure business by way of slump sale from Nykaa Fashion Limited to FSN E-Commerce Ventures Limited: The board has approved to consolidate the Athleisure and Lingerie business of Nykaa Fashion Limited, which is a wholly owned subsidiary of the Companyinto FSN E-commerce Ventures Limited. This will help to streamline and consolidate owned brand business in a single entity in a phased manner, similar to beauty owned brand businesses which are already within FSN E-commerce Ventures Limited.
  • Demerger of eB2B business from FSN Distribution to Nykaa E-Retail: The board has approved demerger of eB2B business “Superstore by Nykaa” from FSN Distribution Limited to Nykaa E-Retail Ltd. This will help consolidate our online beauty business in a single entity. The proposed demerger will drive synergies in two businesses which have common physical and technology infrastructure, common brand partners as well as are involved in the retail/distribution of common products. The scheme is subject to necessary regulatory and stakeholder approval.
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