Business

COVID-19 impact: Nykaa suspends operations days after raising Rs 100cr

Updated : March 31, 2020 08:59 PM IST

Nykaa informed vendors on Tuesday that the company's cash flow and income have been impacted as it had had to shut operations.

Beauty products and cosmetics retailer Nykaa has suspended operations and also informed vendors and partners to expect a delay in payments as the business has been disrupted in the lockdown due to the COVID-19 crisis.

This comes even as the company raised Rs 100 crore in funding just a few days ago. As per regulatory filings sourced from paper.vc, Nykaa raised Rs 100 crore from Steadview Capital on March 24.

Nykaa informed vendors on Tuesday that the company's cash flow and income have been impacted as it had had to shut operations, which could lead to a delay in making payments of outstanding invoices.

The communication sent to vendors was shared with CNBC TV 18 by the All India Online Vendors Association (Aiova).

The company has not responded to queries.

Ecommerce operations have been allowed to run only for essential services under the lockdown, with even etailers such as Flipkart and Amazon only delivering groceries and hygiene products.

"We have suspended our operations and temporarily shut down all our retail stores, our corporate offices, warehouses pan India. The lockdown has already impacted business across industry, and this will have significant impact on the business cycle including cash conversion cycle," Nykaa said in its letter to vendors.

"Like all consumer-facing businesses, we now face a situation where our cash

flow and income are impacted, but on the other hand, our expenses remain constant. In light of this, we find it prudent to update you that there will be a delay in making payments of outstanding invoices to all vendors and partners. We are trying our level best to address this and will keep you posted on the matter," the company added.

The e-tailing sector in India is estinated to have lost $400 million in saleslast week, and is estimated to lose $1 Billion through the lockdown, as per market research company Forrester.

COVID-19 impact: Nykaa suspends operations days after raising Rs 100cr

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