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WROGN raises $9 Mn from Aditya Birla Digital Fashion

EntrackrEntrackr · 9m ago
WROGN raises $9 Mn from Aditya Birla Digital Fashion
Medial

Men’s apparel brand WROGN has raised approximately Rs 75 crore (approximately $9 million) in funding from Aditya Birla Digital Fashion Ventures Ltd (ABDFVL), increasing ABDFVL’s stake in the D2C fashion brand from 17.10% to 32.84% on a fully diluted basis, as per a stock exchange filing. Earlier, in June this year, WROGN secured Rs 125 crore ($15 million) from TMRW House of Brands, an Aditya Birla Group company. This investment saw TMRW acquiring a 16% stake in WROGN, valuing the Bengaluru-based brand at around $105 million. Aditya Birla Group’s TMRW has now backed eight Indian fashion brands, including men’s casualwear brand The Indian Garage Co, casualwear Bewakoof, athleisure brand Nobero, children’s brand Nauti Nati, denim label Urbano, and casualwear brands JuneBerry and Veirdo. Founded in 2014 by siblings Anjana and Vikram Reddy, WROGN is a leading name in casual wear, offering a wide range of apparel, footwear, and accessories. Leveraging cricketer Virat Kohli’s influence, the brand has expanded its reach through exclusive brand outlets and partnerships with major e-commerce platforms. Since its inception, WROGN has raised approximately $90 million from investors like Accel, Flipkart, Virat Kohli, and Sachin Tendulkar. In November 2020, Flipkart invested an undisclosed amount in WROGN’s Series F round. Flipkart is also an investor in Hrithik Roshan’s HRX, which competes with WROGN. WROGN’s revenue from operations dropped by 29.2% to Rs 243.75 crore in FY24, down from Rs 344.3 crore in FY23. Despite implementing cost-cutting measures, the Virat Kohli-backed brand saw its losses up by 28.2%, reaching Rs 56.76 crore compared to Rs 44.26 crore in FY23, primarily due to a sharp decline in sales. According to a recent report by TMRW X Bain & Company, the fashion and lifestyle sector is India’s second-largest consumer category, valued at $110 billion, with online sales accounting for around $11 billion, or 10% of the market.

Virat Kohli-backed WROGN’s revenue dips 29% in FY24

EntrackrEntrackr · 10m ago
Virat Kohli-backed WROGN’s revenue dips 29% in FY24
Medial

Virat Kohli-backed men’s apparel brand WROGN’s parent company has been struggling to grow, as the company’s revenue dropped by over 29% in the fiscal year ending March 2024. At the same time, the firm’s losses surged by 28.2%, nearing the Rs 57 crore mark during the same period. WROGN’s revenue from operations dwindled 29.2% to Rs 243.75 crore during FY24 as compared to Rs 344.3 crore in FY23, its consolidated financial statements sourced from the Registrar of Companies show. For background, WROGN reported a flat scale in FY23. The firm also generated Rs 21 crore from interest and gain on financial assets which took its overall revenue to Rs 264.8 crore in FY24. Founded in 2014 by brother-sister duo Anjana and Vikram Reddy, WROGN is engaged in the business of trading outdoor products such as apparel, footwear, and accessories among others. Leveraging Kohli’s influence, the brand has rapidly expanded its presence through exclusive brand outlets and strategic partnerships with marketplaces. On the expenses front, cost of materials formed 53.6% of the total expenses. This cost slid 29% and stood at Rs 163.91 crore in FY24. Employee benefits expenses also saw a dip by 7.5% to Rs 32.26 crore during the same period. Significantly, the employee cost also includes ESOP expenses worth Rs 1.96 crore. Commission paid to the selling agents was down by 28% in FY24 at Rs 30.83 crore while other expenses such as advertising promotions and legal & professional fees also shrank significantly. In total, the overall expenditure of the company went down by 24.7% to Rs 305.56 crore during FY24 from Rs 405.6 crore in the previous fiscal year. For the complete expense breakdown, head to TheKredible. WROGN tried to cover up its losses by taking cost-cutting measures but due to the sharp fall in collection, its losses increased by 28.2% to Rs 56.76 crore during the year against Rs 44.26 crore in FY23. Its operating cash outflows, however, improved by over 63% to Rs 5.23 crore during the year. Its outstanding swelled to Rs 636.58 crore as of FY24. As per TheKredible, the firm’s EBITDA margin and ROCE stood at -6.04% and -72.07%, respectively. On a unit level, WROGN spent Rs 1.25 to earn a rupee of operating revenue during FY24. FY23-FY24 FY23 FY24 EBITDA Margin -4.42% -6.04% Expense/₹ of Op Revenue ₹1.18 ₹1.25 ROCE -25.49% -72.07% Aditya Birla’s TMRW recently picked up a 16% stake in WROGN at a $105 million valuation by pouring in Rs 125 crore or $15 million. It’s worth noting that Aditya Birla also acquired a similar brand Bewakoof in December 2022. WROGN has raised around $90 million from the likes of Accel, Flipkart, Kohli, and Sachin Tendulkar since its inception in 2014. In November 2020, Flipkart invested an undisclosed amount in WROGN’s Series F round. The e-commerce major is also an investor in Hrithik Roshan’s HRX which competes with WROGN. According to TheKredible’s D2C report, fashion (apparel, jewelry, footwear, eyewear, and accessories) is the largest category attracting a large set of consumers. India’s fashion industry is booming, with the potential to reach $43.2 billion by 2025. But seeing how anaemic or even negative the numbers have been for most, one can only marvel at the outlier that a Zudio has been over the last two years with its triple-digit growth. Of course, the broader slowdown in the category has been blamed on multiple possible factors, including a craze for investment in the stock markets directly or indirectly. Or perhaps the prioritisation of getting an iPhone over other branded products, considering the rise in iPhone sales in India. Either way, WROGN’s numbers indicate a problem it has acknowledged for some time now, and is making efforts to manage. The challenge it faces is as tough as any pitch Kohli has played on, one suspects.

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