TIDMKOOV
RNS Number : 9725K
Koovs PLC
03 September 2019
3 September 2019
Koovs plc
("Koovs" or the "Company")
New Brand launched and further roll out of Concessions
Koovs plc (AIM: KOOV), the Western fashion experts for online
Indian consumers, is pleased to announce a new contract with Future
Lifestyle Fashions Limited ("FLFL") to develop a new and exclusive
fashion range for FLFL's Brand Factory (the "Brand Factory
Contract").
Under the terms of the Brand Factory Contract, Koovs will
develop an exclusive range of menswear clothing for Brand Factory
on a wholesale basis, with no right of return if the goods are not
sold. The new range will be available under the Chelsea King brand
name and, initially, will be sold in 25 Brand Factory stores. The
first season, commencing Sep-19, is expected to generate wholesale
revenues of approximately GBP0.6m, and be profitable after
deducting the cost of the goods sold. In addition, the Brand
Factory sales will pass through Koovs' supply chain which will also
benefit from the increased volumes. The Brand Factory Contract is
valid to 31 March 2022.
In addition to the Brand Factory Contract, the Future Group
Strategic Partnership will see the further expansion of retail
distribution for Koovs Private label in Central Stores concessions
and in new Brand Factory concessions ("Concession Expansion").
As part of the Concession Expansion, Koovs Private label will be
rolled out in additional five Central Stores, two in Bangalore and
one in each of Hyderabad, Noida, Pune making eight stores in total.
This revised agreement signed on 2 July 2019, expands from that
signed on 3 October 2018 (as announced on 7 May 2019) and is
expected to generate revenue over the next 12 months of c. GBP0.15m
and be profitable after deducting the cost of the goods sold and a
30% commission payable to FLFL on the value of goods sold.
The distribution of Koovs Private Label Menswear will also be
piloted in three Brand factory stores - Bangalore, Mumbai, New
Delhi. This agreement, signed on 15 June 2019 and valid until 31
March 2022, is expected to generate revenue over the next 12 months
of c. GBP0.1m and be profitable after deducting the cost of the
goods sold. There is no commission payable to FLFL on the value of
goods sold.
Mary Turner, Chief Executive Officer of Koovs plc, commented:
"The signing of this latest contract with FLFL, to develop a
completely new fashion brand, and the further expansion of our
Strategic Partnership with Future Group brings more growth
opportunities for both parties. We remain convinced of the long
term potential for the Indian online fashion market and for Koovs
in particular."
Related party transaction
For the purposes of the AIM Rules for Companies ("AIM Rules"),
FLFL is a substantial shareholder in the Company and therefore a
related party. As such, the entering into the Brand Factory
Contract constitutes a related party transaction pursuant to the
AIM Rules.
The directors of the Company, other than Avni Biyani, who
represents FLFL on the board of the Company, having consulted with
Strand Hanson Limited in its capacity as the Company's nominated
adviser for the purposes of the AIM Rules, consider the terms of
the Brand Factory Contract to be fair and reasonable insofar as
shareholders are concerned.
Further detail on the Brand Factory Contract
Brand Factory, part of the Future Group, has 93 stores across
India selling both international, domestic and own label brands at
discounted prices with discounts on products usually ranging from
20% to 70%. Koovs products will be sold to Brand Factory at a price
that will allow both Koovs and Brand Factory to make a positive
gross margin after the discounts have been applied.
END
For further information please contact:
Koovs plc
Mary Turner / Robert Pursell
Tel: +44 (0) 20 7151 0170
Strand Hanson Limited (Nominated & Financial Adviser)
James Harris / Ritchie Balmer / Georgia Langoulant
Tel: +44 (0) 20 7409 3494
Whitman Howard Limited (Corporate Broker)
Nick Lovering (Corporate) / Mark Murphy (Institutional
Sales)
Tel: +44 (0) 20 7659 1234
Media enquiries:
Newgate Communications
Adam Lloyd / Fiona Norman
Tel: +44 (0)20 3757 6880
E: koovs@newgatecomms.com
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No.596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
Notes to Editors:
About Koovs
-- Koovs is a UK business that has built KOOVS.COM into India's
leading online western fashion destination. Koovs' fashion brands
are designed and developed in London exclusively for the young
Indian fashion market where two thirds of the population are under
the age of 35. It has 2.7m following and half a million active
customers.
-- The tremendous potential of the Indian fashion market has
been further underlined by the Strategic Partnership with Future
Lifestyle Fashions Limited (FLFL) which is part Future Group - one
of India's leading retail businesses and one of the top 10 fashion
apparel companies in the world
-- Koovs' proprietary online technology platform powers
KOOVS.COM and is a proven market-leading success in India's rapidly
expanding e-commerce market. The capability and scalability of the
platform has been recognised by FLFL which has contracted Koovs to
build and maintain the online platform for its Brand Factory retail
format. For more information, please visit www.koovs.com and follow
us on Facebook, LinkedIn, Twitter @mykoovs and Instagram
@koovsfashion.
About Future Group
Future Group is one of India's leading consumer, retail and
services companies covering fashion, food and homewares. It owns
over 60 brands, operates close to 2,000 retail stores spanning over
22 million square feet and attracts a footfall of over 500 million
a year. Future Group sells in the region of 300 million garments a
year, making it one of the top 10 fashion apparel companies in the
world. Future Group also has one of India's most unique and
rapidly-growing digital payment platforms, Future Pay, which has an
active user base of over 6.5 million.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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