Kogan suffers close to $24 million in losses

The online retail giant Kogan has suffered close to $24 million in losses. However, the company claims it is ‘on track’ for a return to profitability despite the setback. Kogan reportedly over-invested its stock in the previous financial year to counteract the supply chain issues caused by the Covid-19 pandemic.

The company pre-released its results for the six months that ended December 31, showing that revenue fell 34.3% to $275.6 million, while its statutory losses increased to $23.8 million from $11.8 million loss a year ago.

Kogan informed investors on Monday that it was forced to heavily discount and sell some products at a loss as it worked to clear its overstocked warehouse. It also recorded a decrease in its warehouse inventory of $98.3 million at the end of December, falling from $159.9 million in the six months from June 30.

Kogan.com founder and CEO Ruslan Kogan is optimistic that the company will move past its losses, with shoppers buying the latest technology as they spend more time at home amid the rising cost of living. Mr Kogan said the company was ‘on track’ to profitability after its inventory blowout and is keeping value-focused shoppers at the forefront.

Kogan returned to profitability in January after recording earnings of $1.5 million for the month.

The company is also trying to send out orders from luxury furniture retailer Brosa after it bought the company when it went into liquidation. Brosa was liquidated on January 31 after plunging into voluntary administration late last year.

The collapsed business reportedly owed $24 million, including $10 million in unfulfilled orders. Kogan bought the remains of the Brosa business for just $1.5 million and struck a deal with administrators to deliver unfulfilled orders if stock was located in storehouses.

Kogan’s rescue of Brosa was praised, but customers have slammed Kogan as they still wait for their orders to be delivered. Some have complained that the online retailer is charging them delivery fees for items they already paid for.

Insolvency firm KordaMentha, which acts as the administrator for Brosa, has sent emails to several customers that their previously ‘allocated stock’ is now unaccounted for, and its delivery will not be fulfilled. Some customers have been sent a link and given 14 days to pay the ‘reasonable’ delivery cost.

A Melbourne customer, who did not want to be named, told Daily Mail Australia earlier this month that half of her $7,500 order was classed as ‘unallocated,’ including pieces of a modular couch.

She said, “They [Kogan] sent me an email saying half of the couch is unallocated, but we will send you what is allocated. Why would I want half a couch? I asked for a refund or at least a credit to which I’m still waiting on a response.”