Nykaa shares to remain in focus as fashion CEO Nihir Parikh steps down

Nykaa’s fashion segment will grab investor attention on Friday after Nihir Parikh, CEO of Nykaa Fashion, resigned from his position citing personal commitments. His resignation, effective December 5, 2024, was disclosed in a regulatory filing on Thursday.

Parikh, who joined Nykaa in 2015, played a key role in shaping its fashion vertical. A chemical engineer from the University of Mumbai and an MBA graduate from INSEAD, Parikh brought extensive experience from his previous stints at Genentech Inc. and GE Healthcare.

Mixed performance in fashion segment

Nykaa’s fashion business has faced headwinds in recent quarters. In the second quarter of FY24, the segment recorded a modest 10 per cent year-on-year growth in gross merchandise value (GMV). The company attributed the tepid performance to major festivals being scheduled later in the year, delaying typical demand spikes for fashion products.

Parikh previously highlighted underperformance in Indian and ethnic wear, the company’s anchor category, due to subdued event and festival-related demand. Despite these challenges, Nykaa's overall Q2 results showed resilience, with operating revenue growing 24 per cent year-on-year to Rs 1,875 crore and consolidated net profit surging 66 per cent to Rs 13 crore.

Strategic pivots ahead

Parikh’s departure coincides with Nykaa ramping up its quick commerce initiatives. The beauty and lifestyle retailer has focused on fast-moving stock-keeping units (SKUs), promising delivery within thirty minutes to three hours for essentials like beauty products. This shift reflects Nykaa’s strategy to bolster its market position amidst growing competition in the e-commerce space.

Investors will closely monitor Nykaa's stock performance, particularly in light of leadership transitions and evolving market strategies. While challenges persist in the fashion arm, the company's broader growth trajectory and quick commerce pivot could play pivotal roles in sustaining investor confidence.