Mohanty still with Jabong; expects 20-30 % growth
Refuting media reports on his exit from e-commerce player Jabong, its CEO Sanjiv Mohanty said he was “still with the company” and expects it to achieve 20-30 per cent growth in sales this year.
Claiming that Jabong, which is reportedly on block for sale, is charting a turn around in business, Mohanty reportedly told PTI that Global Fashion Group (GFG) firm is tracking a good pace of growth.
"We have seen small growth... we are tracking about 20-30 per cent growth," he told PTI. The company he said had narrowed down its gross loss to Rs 46.7 crore for 2015 on the back of lower level of discounts from Rs 159.5 crore in 2014.
Its net revenue rose 7.1 per cent to Rs 869.1 crore in 2015 compared with Rs 811.4 crore in 2014.
The GMV (gross merchandise value) in 2015 increased to Rs 1,502.9 crore compared with Rs 1,320.6 crore in 2014.
When asked about reports that he had put in his papers, Mohanty said, "I am very much here. I have spoken to the team too and assured them that I am still with the company."
Jabong had brought in Mohanty, who has over 20 years of experience, on board last year to steer Jabong that has been facing strong competition against the likes of Myntra (owned by Flipkart) and Amazon.
On a possible sale of equity, Mohanty said the company is exploring multiple options, including getting new investors on board or a complete sell out. "We have always said that we are looking at all options. I can't give you a timeline as these things take time. It could be 4 weeks or 6 or 8 weeks."
According to sources, Jabong is in discussions with players like ecommerce major Snapdeal, Aditya Birla Group and Kishore Biyani's Future Group for a possible sell out.
The deal, which has been in the works for some time, has floundered in the past as many "suitors have backed out", they say.
Another source close to the discussions said a "distress sale" is more likely now with the withering away of the team and potential investors.
While Jabong investors are seeking a valuation of about USD 100-150 million, the deal, if it goes through, may close at a much lower valuation of around USD 50 million, they said.
When contacted, Snapdeal and Aditya Birla Online Fashion (Abof.com) declined to comment, and Future Group did not respond to emailed queries.
Jabong was founded in 2012. In September 2014, its investor, Rocket Internet merged Jabong with four other online fashion retailers in Latin America, Russia, the Middle East, South-east Asia and Australia to create the Global Fashion Group (GFG).
Swedish investment firm Kinnevik also owns a large stake in Jabongs parent Global Fashion Group.
While Jabong has managed to reduce losses by reducing discounts, both AB Kinnevik and Rocket Internet seem unwilling to infuse fresh capital and are believed to be keen to exit.
In April this year, GFG raised fresh funding from existing investors at a lower valuation, raising 300 million euros from Rocket Internet and Kinnevik.
Post the last round, GFG was valued at 1 billion euros, a significant fall from earlier valuation of 3.1 billion euros. (SH)
Fibre2Fashion News Desk – India