Purple Style Labs, an omnichannel luxury fashion platform for designer wear, has demonstrated solid growth in the fiscal year ending March 2022. The firm, which runs Pernia’s Pop-Up Shop and The Stylist platforms, grew its revenue four-fold with sound economics.
The revenue from operations for Purple Style Labs scaled 4X to Rs 174.56 crore in FY22 from Rs 44.05 crore in FY21, according to its annual financial statements with the RoC.
Purple Style Labs is an omnichannel luxury fashion platform where people can discover and buy Indian designer wear. The sale of luxury clothing accounted for 84.9% of the total collections which surged 3.9X to Rs 148.15 crore in FY22 from Rs 37.91 crore in FY21.
The rest of the revenue came from the sale of services, which include the personalized stylist services. Income from this vertical soared 4.3X to Rs 26.41 crore in FY22 from Rs 6.14 crore in FY21.
Cost of materials was the largest cost center for the elite fashion house which made up 42.8% of the overall expenses. With the surge in scale, this cost grew proportionately 4.3X to Rs 97.43 crore in FY22 from Rs 22.66 crore in FY22.
The company increased its workforce throughout the year to manage growth. As a result, its employee benefit cost surged 2.15X to Rs 41.46 crore in FY22 from Rs 19.23 crore in FY21.
The company opened various studios across Delhi, Mumbai, Hyderabad, Kolkata, Ahmedabad, Bengaluru, and London which inflated its rental cost by 58.4% to Rs 13.1 crore in FY22.
Sales and marketing costs shot up 4.58X to Rs 27.5 crore during FY22 which pushed its overall expenditure to the tune of 2.94X to Rs 227.67 crore in FY22 from Rs 77.28 crore in FY21. Despite a four-fold jump in its operating scale, Purple Style Labs’ losses grew 60.5% to Rs 51.73 crore in FY22.
Its ROCE and EBITDA margin improved marginally and stood at -61.10% and -25.30% during FY22. On a unit level, the company spent Rs 1.3 to earn a single rupee.
Purple Style Labs claims that it has been achieving more than 100% Y-o-Y growth for the last 2 years, closing FY23 with $45 million plus (~Rs 360 crore) revenue on a consolidated basis achieving EBITDA breakeven at the same time. The firm has now raised $14 million in its latest round and anticipates further growth with a projected run rate of $120 million (Rs 980 crore) gross sales by March 2024 (FY24).
Brands emerging in the luxury fashion space, especially based on designer wear have usually hit a ceiling quite early, as the whole idea of mass production of designer wear can be a bit of a contradiction where customers are looking for exclusivity. Purple Style Labs has also reached a stage where it will soon discover the limits of the space, or open up markets that have been very tough to crack so far. A brand like Manyavar has earned the respect it has precisely because it achieved it, but one could argue that the job is still easier in the men’s fashion category, as Manyavar did. Purple Labs certainly has bigger challenges ahead, as it seeks scale and glory with a far more tougher category, womens wear, even though it does cover other segments too.