The race to buy online fashion retailer Jabong is heating up with Alibaba, Future Group, Flipkart’s unit Myntra, Aditya Birla’s e-commerce venture Abof and Snapdeal reportedly negotiating to acquire the online fashion portal.
Jabong is in initial talks with the above mentioned retailers, with Snapdeal and Aditya Birla being the front-runners. The talks are led by Kinnevik CEO Lorenzo Grabau, who was in India last week to meet executives at Snapdeal, Abof, Future Group and Flipkart. Kinnevik is an entrepreneurial investment group focused on building digital consumer businesses.
Jabong did not respond to email queries.
Over the past 10 months, Jabong has been scouring for a buyer. The company has reportedly held talks with online and offline retailers; however, there has been no agreement on valuation.
Kinnevik plans to stay on and find a strategic investor to the company, and is said to be negotiating with buyers on behalf of Rocket Internet which reportedly owns more than 21 per cent stake in Jabong’s parent company, Global Fashion Group (GFG).
Jabong is the latest of Rocket Internet’s struggles in India. It recently sold Fabfurnish, an online furniture retailer to Future Group.
In September 2014, Jabong investors — Investment AB Kinnevik and Rocket Internet AG — had merged the Indian online fashion retailer with four other firms to create a new global fashion e-commerce group, GFG.
The valuation of GFG, which was €3.1 billion in July 2015, reportedly slid to $1.13 billion (€1 billion) after barely 10 months. In May, GFG said it raised $339 million (€300 million) from Kinnevik and Rocket Internet at a valuation that was a third below the previous round’s.
At the end of May, Jabong reported a 14 per cent increase in revenue to €32.6 million for the March quarter. The Gurugram-based firm’s adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) loss narrowed to €11.9 million from €16.3 million in the same quarter a year earlier.
With an aim to start a fresh for a business, Jabong last year appointed former Benetton India head Sanjeev Mohanty as its CEO and Managing Director. This followed various series of top management appointments. But nothing seems to work for e-tailer.