The coronavirus pandemic has resulted in the downfall of several rest and recreational businesses. Many food chains as well as cinema theatres have been shut down for a very long time ever since the lockdown was announced. Among them is the leading outdoor gaming and entertainment centres Smaaash.
Businessman and founder Shripal Morakhia, who also founded the online retail brokerage firm Sharekhan, on 15th September, sent an email to all of his employees as well as to the managers of the locations their centres were situated at which said, “I am sorry that despite my best efforts I have failed in my efforts to save the company from its premature death,” and nothing else.
Smaaash, founded in 2012, had their first gaming centres in Lower Parel and Ghatkopar, Mumbai. The Within 8 years of its founding, Smaaash spread across 41 locations and 19 cities across the nation. One of their international branch is located in Jeddah, Saudi Arabia.
A famous hangout spot for teens and adults, Smaaash includes an array of sporting activities such as bowling, go-karting, dance offs, bike racing, etc. One can also choose to play cricket and face the bowls of leading international bowlers like Lasith Malinga, Shane Warne and Wasim Akram through their specialized programmed nets. Sachin Tendulkar is their official brand ambassador.
With over 5 million people visiting their centres in 2019, it had clocked a per store gross sale of almost Rs 350-600 per square feet. The gaming arena garnered a mammoth 22% growth in revenue counting up to Rs 300 crore by the end of 2019.Smaash also made quite a profit selling their virtual reality games internationally.
Morakhia, in his internal email to his employees also mentioned that although the company investors had given their word, the funding did not materialize, leaving the company in deep waters. Some of their investors include private equity Sixth Sense Ventures and Fidelis World. However irrespective of the company’s desperate and constant efforts to raise funding, both investors did not respond back, leaving the company on its own.
Although the company hoped to see a growth of 10% more in their traffic it saw itself in a deep financial crisis since the announcement of lockdown in the country, resulting in it being shut down for almost 6 months. Although quite a lot of companies and various other industrial sectors received a green light for re-opening by following proper social distancing rules, sports and entertainment centres are still shut down with absolutely no scope of recovery of revenue that they have lost during the months. Even though the Covid cases in India show a positive recovery rate, the speed at which cases are doubling is inevitable.
A survey that was taken in July 2020 in India showed that out of 250 start-ups, almost 70% were severely affected due to the pandemic whereas almost 12% start-ups unable to meet the fixed cost operations resulted in being shut down. Several start-ups such as food delivery giants Zomato and Swiggy as well as cab services like Ola and Uber laid off a large number of employees in an attempt to cut costs and revamp operations.
Written by- Hetvi Mehta
Literary Sources: Economic Times, Scroll.in, Business Insider, Mumbai Mirror, Inside Sport, Vc Circle, NDTV.