Info-tech

Green shoots for Urban Ladder: reports first profitable months in 7 years

Sangeetha Chengappa Bengaluru | Updated on October 24, 2019 Published on October 24, 2019

Rajiv Srivatsa, COO and co-founder, Urban Ladder (File Photo)

The company has hit first profitable months in June and July 2019, coincidentally timed with seventh-anniversary celebrations.

When Urban Ladder came into existence in 2012, it was one of the first organised online furniture retailers ready to shake up the $17 billion furniture market of which 90 per cent is in the unorganised sector. Since then, the founders - Ashish Goel and Rajiv Srivatsa who were classmates at IIM-Bangalore, have seen a lot of highs and lows and seven years later, Urban Ladder is just beginning to see some green shoots, having turned profitable for the first time in June and July 2019.

“We hit our first profitable months in June and July 2019, coincidentally timing with our seventh-anniversary celebrations. We reduced cash burn from ₹4 crore plus in March 2019 to positive ₹30 lakhs in June 2019. We hope to continue to generate profits for 7-8 months of this year to even out losses incurred for the first two months (April & May) of this fiscal and are targeting IPO by March 2021” Rajiv Srivatsa, co-founder and Chief Technology and Product Officer, Urban Ladder told BusinessLine, a day after he announced that he is leaving the company he co-founded with Ashish Goel in 2012.

Elaborating on the company’s performance, Srivatsa who continues to be a shareholder and Board member of Urban Ladder said “We have been delivering great customer satisfaction numbers over the last three months with our NPS (net promoter score) at 75 per cent, one of our highest to date. We are progressing extremely well on the Code Zero project towards delivering customer delight with zero errors. Our retail store expansion has restarted with super pace – we opened four stores in the last 30 days in Pune (2), Mumbai and Chennai of which three are company-owned, and one is a franchisee store and will continue this expansion with 4 more franchisee stores in Hyderabad, Coimbatore, Kolkata and Mumbai by March 2020.”

Read also: Urban Ladder opens first store in Chennai

Asked about the company’s plummeting revenue run rate of ₹270 crore per month, despite this being the most active festive season period, he said “that is because we decided to cut down unprofitable revenue streams – we closed cities which required higher supply chain costs like Chandigarh and Guwahati. On whether the company was considering selling out to one of the country’s top e-tailers, he said: “not at all, everything that you are hearing is fake.”

Pradeep James, director of Design and Visual Merchandising at Urban ladder quit recently, and Vani Kola, Managing Director of Kalaari Capital which has invested in Urban Ladder, has also stepped down from the Board in August.

“The design head’s exit is not a good sign for Urban Ladder as it is a designer brand with deep design sensibilities. And Vani’s exit does not bode well, as she had stepped down from Board positions a few times before - in Indiaplaza.com and Snapdeal when these companies were going down the tubes” said a VC who did not want to be named.

In the January-March quarter of this year, Urban Ladder had handed out pink slips to a significant chunk of its employees across functions in a bid to stay afloat and survive. In an interaction with BusinessLine in the first week of June, Ashish Goel, co-founder and CEO of Urban Ladder had said the layoffs were necessary for the survival of the company. He also said the company was on track to be profitable at the EBITDA level in July and was working towards a goal of delivering ₹8 crore – ₹10 crore of EBITDA this fiscal.

Published on October 24, 2019
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