Purple Style Labs Limited (PERNIASPOP) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1 FY27 Earnings Conference Call hosted by Purple Style Lab Limited. As a reminder, all power spin lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand over the conference to Mr. Abhishek Agarwal, Old-Time Director and Chief Executive Officer from Purple Style Labs Limited. Thank you and over to yourself.

Hi, good afternoon, everyone, and welcome to Purple Style Labs Pernia's Pop-Up Shop Q1F527 Earnings Conference Call. Along with me, we have the SGA team, our Investor Relations Advisors. It's a pleasure for us to address and list our investors as a listed company for the first time. I hope all of you have gone through the investor presentation that we have uploaded on the exchanges and also on our company website. Before I take you through our financial performance, I would like to spend some time explaining our business and how we have evolved it over the last few years. As we believe that understanding the underlying business model is important to interpret our financial performance better. So our core business, Pernia's Pop-Up Shop, is one of the largest and fastest growing multi-brand luxury omnichannel fashion platforms in India. serving customers across India and international markets. We offer a carefully curated selection of luxury passions sourced from more than 1,100 active designer brands and 2 lakh plus SKU's designer products on our website. Our product portfolio spans women's wear, men's wear, jewelry, accessories, and kits wear with a strong focus on the occasion wear segment. We combine online discovery with large format experience centers allowing customers to explore a wide range of designers on our website While providing personalized styling and an immersive shopping experience at our stores. Therefore, we see online and offline not as competing channels, but as complementary in our customer journey. Another important aspect of our business model is our inventory strategy. We follow a breadth over depth approach, offering a wide range of designs while maintaining mostly singular quantity of individual products at our stores. Depending on the product category, we use a combination of outright purchase, backorder, and consignment models with different commercial terms and varying markdowns across designer brands. The unique aspect of our business model is the backorder model, in which the customer places the order first with upfront payment, following which we procure the product from designer with a delivery window of 7 to 90 days, depending on the product. This approach allows us to maintain a very wide curation with efficient inventory management while limiting the need to carry large quantities of individual designer products at our stores. Piesel had acquired Eurnia's pop-up shop in February 2018, prior to which it was primarily an e-commerce platform. Post-acquisition, our journey can broadly be understood through three distinct generations. You can refer to the slide 7 on our presentation for the same. Post the acquisition, our journey can broadly be understood through these three generations. The first generation from FY19 to FY21 was not about laying the foundation. During this period, we transformed Pernia's pop-up shop into an omni-channel platform, opened eight experience centers across five cities, including London, and built the designer brand supply across categories and price points. This foundation helped us grow the platform's GMB from 23 crores in FY19 to 66 crores in FY21. Now, the second generation from FI22 to FI24 was about scaling the footprint. We scaled our experience centers' presence to 13 locations across 8 cities and started the transition towards large format experience centers, which typically range between 20 to 60,000 square foot, and deepened our designer supply, particularly in women's wear of 1 lakh plus and men's wear segment. During this period, the GMB increased almost 10 times to 622 crores in FI24 versus FI21, while AOV almost doubled from 22,000 in FI21 to 46,000 in FI24. Now, FI24, we then consciously trimmed the long tail of both designers and customers and sharpened our focus on luxury. This marked the beginning of what we call as the third generation of growth, starting in FI25 with a focus on optimizing the platform first. Then after March 25, we have actively changed growth gears and opened four large experience centers during F526. The iconic Fort Mumbai and Southend Delhi locations have been fully operational since Q2 of F526. Then another important project, our Linking Road, Bandra, Mumbai store opened towards the end of March 26. Alongside opened one of the most important milestones of our recent journey, a flagship store on Madison Avenue, Madison, New York. During this time, the average order value increased from 46K in FI24 to INR 76K in FI26, and in the first quarter of 27 has jumped to a further INR 86K. FI27 is therefore the first full year with which we have started realizing the growth trajectory of the investment that we had made in the last financial year. Now, please refer to the slide 9 on our presentation to understand our geographical expansion strategy. This evolution across three generations reflects in how we have scaled our presence in the relevant markets of our industry. In the first generation, we focused on establishing our initial footprint across key cities through eight small stores laying the base for future growth. We also established our first international presence in London in the same window. Now, in the second generation, we scaled this footprint and began moving from bigger stores, starting in our largest market, Delhi, which has a strong concentration of accruent customers and luxury fashion demand, thereby increasing the Delhi GMV contribution sharply to 127 crores in FI24. In our second largest market, Mumbai, we added footprint in the same existing locations of Juhu, Bandra, and Kalagoda, which again led to a steep GMV increase to 127 crores in FI24. During this period, our international business also grew significantly. All online led by US, which contributed the highest GMB in FI24. By March 24, we had grown to 13 locations spread in 8 cities. All of the above combined led to a 10x growth within a short span of 3 years between March 21 to March 24 financial year, crossing another important milestone of 500 crore plus revenue in FI24. Now, since FI26, we have shifted focus on relevant luxury shopping destinations and markets where we see a stronger spending potential by adding four large experience centers in Mumbai, Delhi, New York in FI26. Now, as per FI26 GMB of 722 crores was led by Mumbai at 205 crores and Delhi at 166 crores, which together contributing more than 50% of our total GMB, while international markets also remain key contributor to our platform. So just to summarize the geographical growth strategy, in the first generation, our focus was establishing physical touch points and building the initial omni-channel ecosystem. As we moved to the second generation, we developed a deeper understanding of the luxury customer base and the importance of physical shopping environment. This led us to transition towards large format experience centers typically ranging from 20 to 60,000 square foot, opening our first large format store in Merali, Delhi. In the third generation, these large format stores have become an integral part of our platform strategy and with the focus shifting from simply expanding our physical footprint to improving the customer economics. These large stores act as a discovery and ordering platform where customers can explore a much broader assortment with backorder capabilities, receive personalized styling, and wherever required, also access our wider digital catalog as well while they are present at the store. This is reflected in the steady increase of our average order value from 27K in FI-19 to 46K in FI-24 to 76K in FI-26 and eventually 86K in the last Q1 FI-27, while our annual GMV increased from 23 crores in FI-19 to 722 crores in FI-26. Now, let's post March 24, we entered the third generation of our growth with strategy of trimming the long tail. During FI25, we actively reduced the number of designers on the website and scaled down the marketing spend to trim away the low ticket size transaction of our platform. So, if we move to slide 12 to understand the trimming of the long tail of customers. So, historically, the focus was always on acquiring more customers and building the scale. Since the implementation, the value contribution of our customer base had increased significantly. Average GMB per customer grew sharply to 67K in F524, which increased to 108K in F526. We are also seeing increasing wallet share from our high-value customers. Please refer to the slide 13 for this. In F521, our top 10K customers contributed 59 crores of GMB, which increased to 406 crores in F526. Similarly, in F522, our top 50K customers contributed Rs. 234 crores, which increased to 702 crores in F526. This trajectory is an important part of our third generation strategy, where the focus is increasingly on deepening the wallet share of our customers. This improvement in customer metrics is also visible in our AOV and reflects the transition across generations. During the first gen, the base AOV was 22K in F521. As we move to the second generation, the expansion into higher value women's wear and men's wear along with the first pair of Meroly stores in Delhi. This resulted in steady increase of AOV to 46K by F524. And in the third generation, as we built the focus on luxury positioning and higher value customers, this further increased to 76K in F526. Now, let's try to understand our supply side. The designer brand's ecosystem, which has also gone through a significant transformation as part of the trimming the long tail strategy. In the first and second generation, our priority was to build a very large universe of brands on our platform across price point and categories. However, as the platform scaled, we realized that a very long tail increases the complexity across merchandising, inventory management, designer relationships, and execution. In F524, the top 100 designers were contributing 67% of the sales on the platform. Therefore, since F525, we have consciously moved to a more curated designer universe, focusing our resources on brands and with stronger customer recognition, established product market fit, and the potential to scale. As a result, we have reduced our active designer base from 1910 brands in F524 to 1109 brands in F526. While the AOV increased from 46K to 76K in the same period. Importantly, we continue to maintain a significant breadth of products on our website, while reducing the operational intensity that comes associated with the long-term. Now, on slide 14 and 15, the evolution across the three generations is also reflected in our category mix. In the first generation, the objective was to establish a wide supply of products from all designer categories. In the second generation, we began building greater depth in luxury womenswear, which is 1 lakh plus price point, and menswear. Because of this change in strategy, the 1 lakh plus womenswear increased from 7 crores in FI 21 to 187 crores in FI 24, while menswear grew from just 2 crores in FI 21 to 96 crores in FI 24. Now in the third generation, we are sharpening the focus towards higher value categories, which has led the 1 lakh plus women's wear generating 312 crore GMB in F526 compared to 187 crores in F524. Men's wear has also grown meaningfully to 132 crores in F526. At the same time, the lower value below 35k women's wear has declined from 162 crores to 86 crores in FI26, reflecting the deliberate shift from long-tail supply towards more relevant luxury products, which translates to higher value transactions. Now, let's discuss FI27. We see this is an important year in our journey because the investments made in FI26 are now entering the first full year of operations. We opened four large format experience centers during FI26 and Fort and Linking Road, and South X Delhi and Madison Avenue in New York. In Q1 FI27, the GMV increased to 193 crores from 133 crores in Q1 of FI26, while AOV increased from 66k to 86k. At the same time, inventory reduced from 174 crores in Q1 of FI26 to 159 crores, as well as the net working capital reduced from 105 crores in Q1 of FI26 to 66 crores in Q1 of FI27. These operating metrics reflect the continued focus on customer economics, higher value transactions, and working capital efficiency. Now, let's analyze our 3M FI27 performance from slide 18 onwards. So the growth momentum has continued in 3M of FI27 versus 3M of FI26, with Mumbai's contribution increasing from 28 crores to 50 crores, Delhi from 29 to 39 crores, Hyderabad from 10 to 16 crores, and USA from 20 to 29 crores. Our growth strategy is to focus in geographies by deepening our presence in markets where we see strong customer demand. This is achieved by shifting to large format experience centers with generational gear changes rather than simply just increasing the number of locations in a given city or country. On slide 19, from financial perspective, revenue from operations increased from 106 crores in Q1 of FI26 to 119 crores in Q1 of FI27, but while assessing the performance, the revenue should be adjusted for increase in the advance receipts from customer, which has gone up from 37 crores in Q1 of FI26 to 49 crores in Q1 of FI27. Gross profits also increased to 43 crores while retaining the gross margin at 36% as compared to Q1 last year. EBITDA stood at negative 11 crores compared to 4 crores in Q1 of FI26. This is due to the increased cost structure attributed to four large experience centers which have opened versus last Q1. PAT stood at loss of 88 crores as opposed to 100 crores in last year of Q1 of FI26. Our numbers continue to reflect the investments and operating costs associated with the platform. As we are working towards delivering operating leverage. It's important to look at the business from a cash flow statement perspective as well. So if you refer to the financial summary highlights, slide 19 on the last rows, you can see that the net cash used in operating activities improved from 55 crores in Q1 of F526 to 19 crores in Q1 of F527, while pre-cash flow improved from negative 71 crores last year to negative 25 crores in Q1 of F527. To conclude, PurpleStyle Apps has moved from building the platform to optimizing and scaling the platform in the ongoing third generation. We have built a robust market-leader, omnichannel, global distribution platform for Indian designer brands with a curated designer ecosystem, a growing high-value customer base, and a global network of stores. Going forward, our focus will be on deepening our presence in key markets, improving customer experience and store productivity, strengthening inventory management, and working capital efficiency. All of these for driving greater operating leverage and overall capital efficiency. With this, I would like to open the floor for questions. Thank you.

Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions, may please press star and 1 on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking our questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and 1 to ask questions. The first question is from the line of Ankit Kanodia from Zen Nivesh Advisors, Private Limited. Please go ahead.

Yeah, thank you for taking my question and congratulations on the IPO and your first earnings call. My first question is, in your business, I think inventory becomes a very, very, very important part of the whole puzzle. So, and based on the DRHP, what I could understand, there are three ways you manage inventory. One is the outright purchase, second is consignment, and the third is back order. If you can just give more color on

to which.

I'm sorry, sir, the line for that, yes, it's disconnected, the line for the person who was talking. We'll take the next question from the line of Shantanu Basu from Sniffs Limited. Please go ahead.

Hello, thanks for the opportunity and congratulations from the IPO. I have two questions. So, the first question is with regard to the fact that your inventory declined from $174 crore in Q1 FY26 to $159 crore in Q1 FY27, and the reported net working capital fell from $105 crore to $66 crore. Yet, I see that the operating cash flow remained negative at 19 crore, while borrowings increased from 371 crore at FI 26 end to 436 crore at June 2026. So, what is driving the continued funding requirement? And at what point does the business become self-funded? And what is the targeted sustainable short-term debt level? That is question one, and shall I call out my question two as well, or will you answer, and then I'll answer.

I think let me answer the first question for you. So, as we explained that the inventory in our business model is operating in a slightly unique model, where we focus more on breadth rather than the depth. So post-2022, when we started building the inventory, it was built across brands and across price points to understand which category would work best for us. And the typical cycle to liquidate the inventory is relatively larger in our industry. So, once we cross three years of inventory accumulation, so if you refer to the slide in the appendix on the consolidated financial statements and go to the balance sheet, you will see that the inventory increase across years was there from 80 odd crores in F523, 214, F524, 260 crores in F525. Now, in F526, despite opening four large stores, we were able to manage the inventory at a similar level. Now, given our efficiency on the inventory management has been established, therefore, you are seeing a reduction on the inventory from Q1 last year to this year. The networking capital has reduced primarily due to inventory, and the second aspect on that is the increased advance from the customers. So as I explained the backorder model to you in my call, that a portion of the business comes from the backorder model where the customer pays up front. So given that we have four more large stores operating this year, the advance from the customer in Q1 was at a higher number, which also contributed to the reduction on the working capital. Now, in our business, the quarterly numbers can sometimes be erratic, so it's important to see them in a cumulative sense. Hence, I would advise as you see more quarterly numbers over the next few quarters, you will get a much better clarity in terms of how the inventory will be managed going forward. And to answer a question on the working capital reduction, but still there's an increment. So there are more line items which are driving that because the outstanding debt on the balance sheet was 370 crores. So we had to fund the interest for that. And because Q1 in itself is not operationally profitable as a business, but it also establishes your fixed cost structure for going forward. So, the operating leverage which is delivered in the business because of the fixed cash flow usually reflects in the subsequent quarters of the business. So, hence, my advice will be to observe the subsequent quarters to understand the moment of cash flow in future.

Okay. And my second question is the fact that the management has deliberately eliminated the mass premium long tail and shifted the platform towards higher value luxury categories, as you stated during your speech. Now, women's wear above 1 lakh increase from 196 crore GMV in FY25 to 312 crore in FY26, while the lower price women's wear declined. So my question is, does the higher ticket strategy generate materially better gross margin and customer retention, or is the primary benefit higher AOB? Am I getting gross margin improvement as well, as well as customer retention?

So, I think we need to understand the gross margin from an absolute perspective in this case and as opposed to a percentage. So, as far as the percentage is concerned, the percentage across categories for us is not very different. But as I explained on the call, it is not just the consumer side benefit that you get by eliminating the long tail. It's also the efficiency on the supply side. So from our perspective, the below 35k was adding burden onto the platform from number of customers and designers both who collectively were not contributing enough gross sales for us to maintain them. So, another way to look at this strategy is if you go to the slide 13 to understand the customer contribution, then you will see that out of the 66K customers that were served in the FY26, out of that, 50,000 contributed 702 crores out of the 722 crores. So, what you are seeing is a comprehensive strategy which was implemented in the beginning of FY25. So, hence, the customers have been reducing, but the GMV has been growing. Another easier way to understand the business is if, let's say, in F522, I had 10K customers who contributed 154 crores. That's about 1.5 lakh of customers. In 26, you have 50K customers who are contributing 700 crores, which is 1.4 lakh. So an easier way to understand is that you were able to grow 10K customers with an average buying capacity of 1.5 lakhs a year, made it 50K. So, the long tail doesn't add any significant value when you are able to grow the customers in this category with this propensity.

And the same will be true for designer size. Okay. Okay. Understood.

Mr. Paso, any further questions?

No. Thank you.

Thank you. We'll take the next question. Thank you, sir. We'll take the next question from the line of Ankit Kanodia from Zen Nivesh Advisors Private Limited. Please go ahead.

Thank you. I'm sorry for that dropout. I was asking about the inventory. I think in our business, inventory becomes a very important and critical cog in the wheel. So we have three ways in which we do inventory. So we have outright purchase, consignment, backorder. If you can give more color as to how we strategically think on all these three ways of keeping inventory and what would be a rough breakup in terms of how much will be outright, how much will be consignment, how much will be backorder.

So, let me stick to the data, Angit, which is there on the slide 19. It will give you a fair bit of an idea. So, if you see the inventory on FY23 was 87 crores. The idea was we started building inventory from FY22 when we decided to focus on, you know, the larger format stores and, you know, the higher price point products. The inventory increment went on till March 25. And despite opening four large experience centers, we were able to manage the inventory at the same level. Now, going forward, typically, if we are not doing any expansion, the inventory would more or less remain, you know, in this range. Now, why you are seeing a reduction, you know, from last year of Q1 to this year of Q1? Because as I said, now, given that we have large format experience centers and we have been able to do the inventory management more efficiently. So over the next few quarters, you will get an idea where the inventory at an overall level would be there. Now, obviously, the inventory on our books, which is the outright purchase, is what you are seeing here. For the backorder part, now, the backorder part usually is a function of the revenue that you are doing. So if you see the revenue advance from customer was about 49 pros. So if you just go and divide it from, let's say, last 12 months odd revenue, you will see that that's about one month of revenue. And if you take an average delivery of somewhere between 45 to 60 days, so from this, the ratio can be calculated. So as far as the inventory is concerned, inventory doesn't usually have any component of the backorder. The backorder is like any other platform where the customer pays up front, and once the product reaches out, it gets shipped back to the customer. We'll be typically holding inventory only for a very few days in our warehouse for those kind of backorders. Now, on the consignment bit, I think that's the business-sensitive data, so that I won't be able to disclose publicly, but whatever is outright purchasers is already forming part of this inventory, and which is getting more and more efficient with year by year.

Thank you so much for the detail answer. So, is my understanding correct that outright purchase would form a larger portion of the inventory than confinement? I'm not asking for a…

Yes, yes, because I mean, since we don't buy depth of inventory, it's important that we buy bread, and bread would typically buying, you know, singular units for each store. So if you walk into, let's say, any of the large Mumbai stores, and it has hypothetically, it's 5000 pieces, you can assume that all 5000 pieces are different. So it's a unique way of retailing where you show the bread, but you don't really have to stop because the customer is willing to wait and pay the money upfront in this particular industry.

Right. So, that was very helpful. So, my second question is related to finance cost. So, finance cost has two components as you have rightly segregated in your presentation. One is the interest on lease liability and the other one is other finance cost. I'm assuming other finance cost means basically interest on loans. Yes. So, any color on a directional basis, how do we see that going forward in FY27 and FY28? Both these interest on lease liability So the

interest on lease liability and combined with the depreciation on right of use of assets, that's typically a function of if you do any expansion or make any changes. So as I said, we have already done all the changes till March 26. So they formed a part of, you know, already, which is projects which are already done. So the Q1 that you see right now is pretty much what we are operating as cost structure today. So I don't see any significant change in that. Unless we make any change to any of our stores in future, which at the right time, we will be notifying. Now, as far as the other finance costs are concerned, as you said, it's linked to the borrowing on the books. The idea is that as we accrue more and more operational profit from the business, that debt can keep on reducing, which would directly affect the other finance costs. Right. I mean, honestly, a couple of quarters from here, you will have a much better trajectory on how it moves. Right, right.

So, when I look at the P&L in general, so it's very difficult to have a view of where the margins would be because all these are, we are still, we heavily invested in FY25 and FY26. So, I can't expect anything, I can't expect you to give me any color next few quarters, how the margins will come. But if I have to take a, say, two, three-year view, if you can give more color as to where do we see our company moving forward from margins perspective, from profitability perspective, and more importantly, from a business standpoint with our competitors in general?

Good morning, everyone. You know, even other expenses in three segments for you, which we obviously will keep reporting going forward. So that will give you a better idea in a couple of quarters that how quarterly the expenses move for this company. Now, after that, as far as the operating cash flow are concerned, they go hand in hand with P&L. The purpose of giving even in a limited review quarter, the balance sheet and cash flow was because you cannot understand our business just from the P&L. It has to be always looked at in conjunction with the balance sheet and My request will be to observe it for a couple of quarters. I think you'll be able to figure out the answer for yourselves.

Thank you so much and all the best for the future. If I have any questions, I'll come back in the queue. Sure, sure. Thank you.

Thank you. A reminder to all the participants that you may please press star and want to ask questions at this time. The next question is from the line of Devanshu Bansan from MK Global. Please go ahead.

Hi, Abhishek. Congratulations. Thanks for taking my questions. Abhishek, I, with reference to your initial remarks, which mentioned that I opened four large experience centers across Delhi, Mumbai, and New York, so I wanted to check should this sort of lead to an exponential growth for us in FY27 before we return to a normalized growth in FY28, so I just wanted some qualitative outlook from that perspective.

So, what we have done, Devanshu, in the financial summary, we have tried to give you the comparative numbers for all the levels, which starts with GMV, then revenue, then gross profit, then EBITDA, and so on. As I mentioned, the cost structure in our business model is pretty much fixed. Q1 is usually the leaner quarter in our business. So, over the next two quarters, I think the numbers would be fairly clearer to the broader market in terms of how the growth trajectory will pan out. But, as I said, it's always important to look at the revenue adjusted to the customer advance as opposed to just looking the revenue in isolation.

That's fair. So, my question was more from GMV perspective. So, I understand the bridge between GMV and revenue.

I wanted to check.

So, maybe if you could just help us better understand there is a typical seasonality in your business. So, maybe historically, whatever you have witnessed, how much does 1Q typically contribute to the annual sales in terms of G&B?

So, as I said, Devanshu, like Q1 is obviously the leanest quarter. It increases in subsequent quarters. But I think the numbers would be relatively clearer once we see the next two quarters evolving into the year. But yes, since we have invested into the whole last year, this first full year is going to give a very clear scenario run for us for the future. I was saying it's better that we focus on the long-term basis on how the pace is set in FI27.

Got it. And Abhishek, secondly, you mentioned that you have a back-order model, and we are We're seeing that working capital is further reduced in one queue. So, wanted to check as your business sort of grows, this backorder tailwind you'll keep getting from a working capital perspective. So, ideally, how do you look at that from a long-term perspective for the working capital intensity in your business?

So, as I said, inventory for us is a function of how much is the shell space. If the shell space is not going to change much, the inventory usually just moves in a smaller range based on the cycle of the quarters. The same is true for the advance from customer. Now, as I said, the typical average delivery timeline is the range is 7 to 90 days. So even if you average the products to be in 45 to 60, and currently you can see that usually the advance from customer is approximately one month of revenue, Which basically means if my at any point of time is we have 45 days average delivery, so that backorder is going to contribute almost close to 40 to 50% of the sales at any point of time. So it's going to move in that range of one month revenue. As business increases, that advance from customer typically would increase. Inventory stays flat, which definitely would have a reduction in the working capital if that comes from. And hence, I said, you know, a couple of more quarters will give us a fair bit of clarity when you stack them side by side.

And one last question from my end. So, you clearly mentioned that you don't, your quarterly cost structure is well represented by how 1Q has for you. So, wanted to check on your plans for addition of experience centers, right? So, going ahead, how do you see whether this 1Q cost structure can be sort of extrapolated for the next couple of years, and whatever top-line leverage you will get will keep adding onto your bottom line, or do you plan to add new experience centers over the next couple of years?

So, I mean, from a share operating leverage concept, yes, the Q1 usually defines the cost structure that will be there for Q2 unless there is a change. Immediately, there is no significant expansion inside because we have already done four last rows in last financial year. So, we would want that scenario run to happen. At any point in future, if our expansion plan change, we will make sure we communicate it in our future quarterly course.

Godly, Dabisha, it's very helpful. Thanks for taking my question. Thank you very much.

Thank you. The next question is from the line of Shubhanu Bangal from C8 Capital. Please go ahead.

Yeah, thank you for the opportunity. I hope I am audible. Sir, my question on the SSHG's font, what was the SSHG, our mature experience center in FI26?

Yeah, so we do not look at from a store perspective. If you go to the slide, let me just give you a reference. So if you see the slide 9, which has a geographical distribution, so we use the model of a geography line item as opposed to store. So to give you an idea, let's say Mumbai had three locations in FI21. We added more units to those locations, which increased the sales to 127 crore GMB. Now we have shifted to two large format centers in Mumbai, and we have shut all the previous locations, which were much smaller in size. So from our perspective, tracking a same store growth doesn't make sense. As opposed to that, we always look at how much business are we extracting from a geography. So whenever there is a change in that, you always get to know because we would typically inform, okay, this is being changed to this store. Till then, that same store growth is same as, you know, that city's growth. So, if you take any other example, let's say Amdabar, for example. So, whatever you see in Amdabar on 21, 27, 31, there's been no change in Amdabar. But whenever you see a change in Amdabar, that will basically create either a spike or dip depending on how that changes in that setting.

Okay, I think that happened with USA business because FI24, USA business, GMB was 136 here, but FI26, GMB is down to 77 here.

But just to clarify, that is not store. You can see that there was international, so US and UK is international omni-channel business. It's online and offline both. US did not have a store until March this year. So that was only online. And as I mentioned during my call and also in the presentation, we trimmed the long tail, which was mostly, you know, businesses, I mean, brands and customers who were contributing to the lower side of the average order value. That has led to that dip. That is not a negative same store growth because there was no store. But going forward, now given that the New York store has opened, we would always look at US in conjunction, contribution at an omni-channel level, how much US does, which is what you see in UK. So whatever you see in UK is the same store operating in London from 2019 and the online business. Despite filling the online long tail in 24 to 25, we still had growth.

Okay. And my second, last question on the average order value. As you mentioned, we increase our average bill value and average order value in women's wear. As above one last segment continue growing, that means our margin will be increased going further. But you said that happening, that helps our designer also and our product segment also. But margin not only increase. But normally, in any business, as value segment, as volume decrease and value growth happens, normally margin increase. I don't understand that. I couldn't understand that.

So, all I am saying is there is one part in margin which is the percentage, one part which is absolute. So, because we work with brands on a commercial understanding of a markdown, the prices are usually set by the brand. See, because in this, you are assuming that something which is 2 lakh rupees is expensive and something which is 50,000 rupees is cheap. That's not true because they would be two different categories of products as well. So hence my point from an absolute perspective, if I'm operating, let's say at an average 40% margin, I'm just giving a number. So selling a 2 lakh rupees piece gives me 80,000 margin. Selling a 20,000 rupee piece gives me only 8,000 margin. So from an absolute perspective, it's higher margin. But percentage perspective, it completely depends on what markdown I'm working with that brand. That's why you will see a pretty much a flattest GP for us as far as percentage is concerned, irrespective of the strategy on the price point being lower or higher. So, the idea probably there is, if you can sell 100 products of 10x price and generate the same GP, why bother selling 1000 products to generate the same absolute GP? That's the whole idea.

Okay. Okay. Thank you. Thank you, sir.

Thank you. Thank you. Thank you, sir. Before we take the next question, a reminder to all the participants that you may please press star and want to ask questions. The next question is from the line of Rohit Kumar from ADM Advisors. Please go ahead.

Yeah. Thank you, sir, for the opportunity. Sir, I wanted to ask you, can you provide a broad framework to become ABINDA positive? I want to understand at what level of G&B scale and gross margin and operating leverage would be required to achieve positive EBITDA.

Yeah, so I mean exactly that is why we have given more detailed P&L in our presentation. So if you refer to the slide 20, that is exactly what you are asking. So the idea is whenever you have done your expansion, your cost structures would typically tend to get fixed. It would move in a narrow window depending on some operating costs here and there, but it doesn't move massively. So if you see the cost structures where we have placed 23, 24, 25, 26 for you side by side, 26 was an expansion year. So hence in 27, you are seeing an uptick on the salary. Marketing, we have anyways been reducing, as I said, so you don't see any uptick there. Logistics is being flat, so we are generally efficient there. And other expenses would be a function of, again, some of the costs related to the large format experience sector. So now you know what are the costs which are in Q1, which pretty much become plattish, because till an expansion is not happening, these costs won't grow drastically higher. So, the calculation, back calculation up to the GP will give you an EBITDA positive straight away there, which basically means if I'm able to grow the GP to 55 crores, it would convert to a zero EBITDA. Now, since the cost structure for stores are below EBITDA for us, ideally, you should add that as well when you want to see the EBITDA positivity. The same answer is there for that as well, which means if you see my increase on lease liability, interest on lease liability and depreciation of right of use of assets, that's 45 crores. But that is the P&L aspect of it. If you see the cash flow line item, which is there on the second last slide, there you will see the payment of lease liabilities and interest on lease liabilities payment combines only 29 crores. So, which means on a cash basis, on that, you will have to add another 29 crore GP to become EBITDA positive. But whereas on a P&L basis, it has to be 45 crores to become EBITDA positive. So, depending on, sorry, becoming operationally EBITDA positive. So, whichever line item you are looking at, you can just add back those costs to EBITDA and see where the GP has to land to cover all these costs. I mean, that's the whole idea why we have given a very detailed P&L apart from balance sheet and cash flow.

Got it. Got it. That was a very detailed answer. Thank you. And my second question was related to the New York Experience Center. At what target customer profile and AOV compared with Indian Experience Center we are looking after? And what level of GMB will be required for the store to reach a cash break even?

Sure. So, if you see our RHP, I have not put in the presentation, but you can see in the RHP that in FY26, our India online AOV was about 38,000, but the stores AOV was about 90,000. But we have also given the UK for your reference for an international store, where, you know, it was almost 460 odd pounds on the online, but it was two and a half times higher on the London store bid. So I think that ratio of two and a half times would be true for New York as well, even though that data is not available publicly from our side. But average order value generally at the stores is about two and a half times. So let's say if my U.S. average order value online is similar to London, which is coming to about 50,000, which means at a store level, it will be about anywhere around 1.25 lakhs, which would translate to about $1,500. Now, since the breakeven is more of a function of, you know, actual sales, as you correctly said, and not a new, it is an indicator how many customers you will have to serve to reach that number. So, it's been only three months, honestly, since we are operating. Now, with this quarter gone, you will have data for six months from New York, which will reflect in the U.S. contribution on the geography bit. So, you can see how much U.S. would have grown With addition to the New York offline business. Now, in terms of profitability, see, it's a June end lease for us. We did a shorter tenner lease to understand how the dynamics would pan out. Depending on how we perform over the first 12-18 months of business, it's always easy basically to tune your rent up and down. Generally, we assume that the cost structure gets more fixed. Since we operate typically only one store per city, for us, it's always easy to maneuver that cost structure. We have historically always done it on the higher side because the business had more and more potential. But at any point, if we have due to on the lower side, that's also possible for us. So I would advise, let's observe the New York performance for FI27, and then we take a conscious call on it on where to move. I mean, what trend to move to make it operationally breaking.

Thank you. Thank you, sir. That's it from my side. Sure. Thank you.

Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Abhishek Agarwal for closing comments. Thank you and over to you, sir.

Thank you, everyone, for joining us on our first learnings call. We appreciate your continued interest and support for PurpleStyleLabs Ernie's pop-up shop. We remain focused on building a scalable and sustainable luxury fashion platform with disciplined execution across customers, designers, stores, and capital. We look forward to continuing this journey with all our stakeholders and updating you on our progress in the quarters ahead. Thank you. Thank you.

Thank you, members of the management. On behalf of Purple Style Labs Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your line. Thank you.