Nykaa raises stake in D2C skincare brand Dot & Key for Rs 265 crore; acquires Earth Rhythm
Nykaa acquired a 51% stake in Dot & Key in September 2021, and in the June quarter, the company decided to purchase an additional 39% stake for Rs 265.3 crore, raising it to 90%.
FSN E-Commerce Ventures, the parent of beauty and fashion firm Nykaa has extended its stake in six-year-old skincare brand Dot & Key to 90%, CEO Falguni Nayar revealed during the earning call of Q1 (April-June) FY25. Nykaa acquired a 51% stake in Dot & Key in September 2021, and in the June quarter, the company decided to purchase an additional 39% stake for Rs 265.3 crore. However, Dot & Key founders Suyash and Anisha Saraf will continue to manage and drive the business and will have an ownership stake in the company, Nykaa informed stock exchanges.
Nayar said that Dot & Key has an annualized GMV run rate of over Rs 750 crore as of Q1FY25 and added, that it has witnessed a 9x growth in FY2024 from three years earlier.
Additionally, the beauty-to-fashion e-commerce platform has also acquired a 'majority stake' in Earth Rhythm for Rs 44.5 crore. Nykaa acquired an 18.57% stake in the brand in 2022. As per exchange filings, Nykaa will be acquiring the additional stake in Gurugram-based clean beauty brand through a combination of primary and secondary transactions. Following this, Earth Rhythm will become a subsidiary of FSN ECommerce Ventures Limited.
Nykaa also announced its financial results for Q1 FY25. During the quarter, consolidated GMV grew 25% YoY on the back of strong performance in Beauty, where GMV was up 28% YoY, while Fashion performance continued to be resilient in a muted demand environment, the company said. The consolidated revenue from operations grew at 23% YoY, in line with last 2 year CAGR, totaling Rs. 1,746.1 crore in Q1 FY25, up from Rs 1,668 crore in Q4 FY24.
The beauty segment comprised 91% of the total income while fashion accounted for 8.4%. Its gross merchandise value (GMV) stood at Rs 3,321 crore in Q1 FY25. Nykaa's net profit stood at Rs 13.6 crore in Q1 FY25.
Beauty GMV showed a growth of 28% YoY in Q1FY25, in line with long term beauty industry growth trajectory. Nykaa stated the performance was result of accelerated customer acquisition, up 27% YoY, driving order volume growth. The quarter also witnessed significant IP activations, including Nykaa's flagship Pink Summer Sale.
Nykaa increased its marketing and advertisement spending in this quarter by 24.3% to Rs 194.9 crore from Rs 156.7 crore. Nykaa has increased its ad spending in the 'Beauty segment' by 27% to Rs 1,417 crore, YoY. During the earning call, Nayar said that its 'Beauty brands' are growing at 47% YoY growth driven by Nykaa's online and offline stores as well as GTMT, and other platforms. She said the e-retailer is trying to gain momentum for its multiple 'hydro brands' in the upcoming months through offline expansion and marketing.
In the BSE filing, Nykaa said it is planning to deliver 70%-80% of the orders from Top-12 cities within the same day or the next day within the next few months.
