PRESSURE is mounting on Koovs, the wannabe fashion business Asos of India, after a vital £6.5million funding injection from Indian billionaire Kishore Biyani fell through recently.
The collapse of the investment from Future Group, one of the largest brick-and-mortar retailers in India, is the latest blow for unpleasant retail shareholders in the company.
The retail shareholders have been blaming the business over its performance, as it is struggling for stability and profitability.
Some of the investors have called for a suspension of the shares after the news about the broken fundraising in a bid to avert further damage to the business.
The Lord Alli-founded business has already received £3.7m from its largest shareholder Future Group.
The Future Group has blamed India’s central bank, Reserve Bank of India (RBI), for a delay in sending the cash when it has been facing recent cash flow hurdles.
The business has since announced that it has £3.3m in the bank until the end of the year to remain operational.
The online portal was launched to cater to the needs of the trendy, fashionable Indian youths. Last week, it was a penny stock, with the business worth £10m.
The fashion retailer aims to pause spending cash on new stock and marketing.
Koovs is an online store for western fashion, which supplies fashion clothing, cosmetics, footwear, and others to its Indian customers.
The company is headquartered in India, with an office in the British capital, and serves the Indian market.
It stocks Indian and global brands and its own collection of clothing and accessories. The company has also collaborated with international designers to create clothing series.
It posted a pre-tax loss of £15.5m for the year to the end of March, flat on the previous year. Sales were down to £7.5m from £9.6m.
Founded in 2012, Koovs has around 20 employees in London, whereas 250 staff members are based in India’s Delhi and Mumbai.
Lord Alli has pumped around £20m of his own cash into Koovs after the formation of the company, following his departure from Asos as its chairman. Of that, £8.9m is a loan that would entitle him to the company’s assets if it goes bust.
The company has repeatedly asked for additional cash supply from new and existing investors as it aims to spend cash primarily on marketing to spread its business further.
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