Ethnic wear startup Suta saw its operating revenue increase 33% to Rs 75 crore during the financial year ended March 31, from Rs 57 crore in 2022-23.
The Mumbai-based company’s consolidated net profit fell more than half to Rs 73 lakh from Rs 1.5 crore a year ago. The decline in profit was driven by an increase in total expenses, which went up to Rs 75 crore in 2023-24 from Rs 55 crore in the previous year.
“The biggest lever for growth was the offline stores. The existing stores also grew on their own, and the addition of new stores further boosted overall offline growth,” cofounder Sujata Biswas told ET.
The company’s revenue from offline stores increased 210% year-on-year.
The bootstrapped fashion startup runs 10 offline stores in cities such as Mumbai, Bengaluru, Chennai and Hyderabad. Out of these, seven are franchise-owned, while three are owned by the company.
In 2023-24, the company spent Rs 21 crore on the purchase of stock-in-trade and Rs 14 crore on employee benefits while incurring other expenses of Rs 34 crore.
According to Biswas, the primary reason for the drop in profit after tax was the increase in customer acquisition cost.
Advertising expenses surged 54.5% to Rs 17 crore from Rs 11 crore in the previous year.
“We all depend on platforms like Facebook and Google, and since everyone is trying to capture the attention of that one particular customer, ads are everywhere. As a result, the cost per impression increased, and the cost of acquiring a customer doubled last year,” Biswas said, adding that a significant portion of the expenses went toward opening new offline stores and managing inventory.
Founded in 2016 by siblings Sujata and Taniya Biswas, the direct-to-consumer (D2C) brand sells women’s fashion products such as sarees and blouses. In 2023-24, the company’s own D2C channel accounted for about 63% of its total operating revenue. Sales on marketplaces such as Myntra and Ajio contributed nearly 20%, while the remaining came from offline stores.
Suta competes with the likes of Noida-based Libas, which clocked Rs 500 crore in revenue last fiscal, and Blume Ventures-backed Fashor, which is nearing the Rs 100-crore revenue mark this year. It also competes with listed companies such as Titan’s Indian dress wear business, Taneira.
Titan’s emerging businesses, which includes Indian dress wear, fragrances and fashion accessories, saw a total income growth of 28%, reaching Rs 378 crore in 2023-24, while Aditya Birla Fashion and Retail Ltd‘s ethnic vertical recorded revenue of Rs 2,190 crore during the fiscal, up from Rs 1,000 crore in the previous year.
Suta is targeting an operating revenue of Rs 85-90 crore for this fiscal, with a much higher net profit.
“This year, our focus is also a lot on creating different vertical categories. So, we are doing a lot of category building, for example, getting into men’s wear, kids’ wear, and female apparel, which we didn’t focus much on last year,” Biswas said. “So, this year is going to be a lot more about vertical creation, making them stronger, independent, and giving a name to them so that each channel can grow differently and contribute to the top line.”
