Urban Ladder sets time line for profitability, IPO

Online furniture retailer Urban Ladder seeks to become profitable in 18 to 20 months before going in for an initial public offering in about three years.

After bringing in Ajit Joshi, who used to head Tata’s electronics retail chain Croma, Urban Ladder has been pursuing an omni-channel strategy. Ratan Tata-backed Urban Ladder has started off having a cluster of stores in Bangalore, with plans to have similar clusters in Hyderabad, Chennai, Delhi and Mumbai. While pursuing a growth and expansion strategy, Urban Ladder also has become serious about becoming profitable. It is rationalising its back-end operations in order to bring down cost.

“GST will help us streamline back-end operations across states and for furniture government also has brought down the rate from 28 per cent to 18 per cent. Even for store expansion, we are looking at right store at the right location. We would have a total of 10 stores in Bangalore by March-end. We are making a studied approach in terms of expanding into other cities,’ said Ajit Joshi, president and COO of Urban Ladder.

Expanding its private label portfolio will help Urban Ladder improve margins. “A company needs to set a timeline to achieve milestones. We want to hit profitability in 18 to 20 months and in three years go for an IPO,” said Joshi.

In the online space, most of the companies have been aggressively pursuing growth by spending hugely on marketing and discounting. This has made profitability evasive in e-commerce. Very few companies like Infibeam have gone for an IPO.

As for Urban Ladder, the retail stores have been providing much-needed offline visibility and creating a pool of loyal customers. Many of the online furniture players like Pepperfry and Livspace have gone ahead with their omni-channel strategy.

“We have 7,500 to 8,000 sq ft large format stores and 750 sq ft sofa lounges. The retail stores receive over 400 families in a week and about 9000 f,ootfalls during the weekend,’ said Joshi.

While brick and mortar stores increases brand trust, the technological advantage of being online will help scale the business and track the customer. Urban Ladder is experimenting with virtual reality in the e-commerce platform.