Nykaa intends to expand its omnichannel presence even further. Despite incurring higher expenses due to new store openings, which impacted the company’s bottom line in the December quarter (Q3 FY23), Nykaa intends to open 50 more offline stores this year.

Nykaa’s total store count will be 141 by 2022, with 45 new store openings. “That momentum will continue,” Nykaa executives said in a post-earnings call late Monday.

Speaking to a select group of journalists, We will roll out 50 stores over the next four quarters,” said Falguni Nayar, Executive Chairperson, MD, and CEO of Nykaa. Even though physical retail accounts for less than 10% of our revenue, there is room for expansion in general trade and modern trade. The desire for beauty is extremely strong. It is one of the top three categories in malls across India (along with footwear and sports goods).”

Nykaa reported a 71% drop in consolidated net profits to Rs 8.5 crore in Q3 FY23, despite operating revenues increasing by more than 33% to Rs 1,462 crore. Higher retail expansion expenses and the addition of fulfilment centres drained the company’s net profits during the quarter.

“We’ve treated 2022 as an investment year,” she added. The retail stores account for 50% of our lease costs, warehouses account for 25%, and office space accounts for the remaining 25%. However, these are long-term investments. We have faith in this strategy.”

Nayar believes that tech startups that sacrifice long-term growth for short-term profitability are making a mistake. “It would be a mistake to abandon long-term growth. Managers who sacrifice long-term growth for short-term profit would do more harm to the company, according to the former investment banker.

“We are building our business from a long-term perspective and are continuing to stay in a positive zone,” she added. We are not entering the loss-making zone.”

Nykaa stated that its business momentum was also strong in January and February. With declining inflationary pressures and rising discretionary spending among consumers, the company is on track to acquire over 7 million new customers in beauty and fashion in FY23.
Fashion currently accounts for 31% of Nykaa’s GMV and 14% of its net sales. “It is now a substantial business,” Nayar added. On the BSE, Nykaa shares opened 5.39 per cent lower at Rs 149.10.

Be a part of Elets Collaborative Initiatives. Join Us for Upcoming Events and explore business opportunities. Like us on Facebook , connect with us on LinkedIn and follow us on Twitter.

"Exciting news! Elets technomedia is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest insights!" Click here!