D2C mattress and furniture startup Wakefit is aiming to return to profitability by turning EBITDA positive and cross the revenue mark of Rs 1,000 crore in FY24.
“We at a company level are about to turn profitable in this financial year. We were profitable till about two years ago. When furniture was launched, we went into small losses. This year, we will turn EBITDA positive,” Chaitanya Ramalingegowda, director and co-founder, Wakefit told ETRetail.
Wakefit which was profitable 2 years back, has been witnessing losses since it launched its furniture category. Its mattress and accessories business has been running profitably, the company claims.
Furniture drives about 20 per cent of the D2C brand’s revenue while mattresses dominate the mix with 60-65 per cent and the remaining comes from accessories.
Declining to share FY23 losses, Ramalingegowda said, “We will be able to comment only once the audited financials are ready. At this stage, we won’t be able to comment on the degree of losses, but it is a very small number.”
In the last fiscal, the company recorded 30 per cent year-on-year revenue growth to Rs 825 crore on the back of strong offline sales, affordable prices, and portfolio and SKU expansion.
Noting the difficult environment in the last year, Ramalingegowda said that the brand’s strong R&D and manufacturing capabilities allowed the company to innovate and launch new products at affordable prices and thus contributed to its revenue growth.
He further highlighted that its offline stores played a key role in revenues, with the average order value from offline channels being nearly twice of e-commerce. The company which opened 22 stores last year, plans to add 60-70 stores this fiscal year.
For FY22, the D2C brand’s revenue stood at Rs 633 crore while its losses were at Rs 101.8 crore. Its cost of materials contributed to the majority of its expenses followed by employee and advertising costs. Last year the company also invested in setting up its largest manufacturing factory in Hosur, Tamil Nadu, spread across an area of 6,00,000 square feet. On the funding front, Wakefit raised Rs 320 crore in a series D round earlier this year. www.retail.economictimes.indiatimes.com