Delhi-based omnichannel fashion retailer High Street Essentials Pvt Ltd (HSE), the parent company of fashion brands FabAlley and Indya, has reported profit after tax of Rs 1.3 crore for financial year ended March 31, 2019.
Founded in 2012 as a purely women-centric online brand, HSE which has raised a total of Rs 77 crore in funding to date, has seen a year-on-year (y-o-y) growth of 70 per cent, registering Rs 125.5 crore in gross sales and net revenue of Rs 90.2 crore with an EBITDA of Rs 3.3 crore for FY2019.
The company has 30 brick-and-mortar stores, 350 shop-in-shops in large-format retail stores like Central and Lifestyle, and is also available on Myntra, Amazon, Flipkart, Nykaa and Ajio. At present, 25 per cent of HSE’s sales comes from its own website, while large-format stores are its biggest channel for sales.
“Financial year 2019 marked our transition from a primarily online company to an omnichannel entity, while ensuring our infrastructure, supply chain and product lines expanded efficiently to accommodate both online and offline retail growth. This is the second consecutive year when we reported EBITDA-level profitability. We are on track to close FY20 with gross sales of Rs 220 crore and net sales of Rs 150 crore at a growth rate of 75 per cent over FY2019, with EBITDA and PAT-level profitability,” Tanvi Malik, co-founder of HSE, told
So, how did HSE manage to turn profitable when most other fashion e-tailers are yet to break even?
“We started as a purely online brand; now we are channel agnostic. In 2016, we piloted with some pop-up formats in DLF Promenade mall and in DLF Saket mall in Delhi for about three to six months to see how offline would play out for us. The response was very encouraging and we were flooded with requests from consumers who wanted to see more of our selection. That’s when we decided to go ahead with offline. With online we work with smaller lots, with 18 days of inventory. Offline is a completely different play; however, even now we work with under 30 days of inventory,” said Malik.
At HSE, everything is proprietary and is designed in-house, including sourcing of fabric from Surat and more recently from China. Manufacturing is done by 15-18 contract manufacturers in the National Capital Region (NCR).
In the next 12-18 months, the company aims to expand its retail footprint by increasing its exclusive brand store count to 50 and doubling its shop-in-shops to more than 600. HSE was founded in 2012 by Shivani Poddar and Tanvi Malik, with fast fashion western wear brand FabAlley. In 2016 they launched Indya, an ethnic fusion brand.