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Impact of distribution changes higher than expected; taking steps to bring growth back to Mamaearth: CEO Varun Alagh

Economic Times · 1m

Honasa Consumer, the company behind beauty brands like Mamaearth, experienced a decline in operating revenue and slipped into losses for the second quarter of the fiscal year. The company underwent a restructuring exercise in its distribution and supply chain, transitioning from a super-stockist model to direct distributors. The impact of this restructuring was greater than expected, resulting in a scale reduction and provisions for expired and damaged return stock. However, the company does not foresee any further impact from inventory returns in the coming quarters. Furthermore, growth has been lower than anticipated, partly due to Mamaearth's underperformance in offline channels. The company plans to address these issues by focusing on investment allocation across categories and improving messaging and hero product buildout. The objective is to gain market share across all categories and bring Mamaearth back to the growth path. The company will also allocate investments appropriately across its other brands and focus on strengthening existing categories before expanding into new segments.