Flipkart, through its subsidiary Myntra, has acquired online fashion retailer Jabong from its parent company Global Fashion Group (GFG). Future Group, Snapdeal and Aditya Birla Group-owned Abof were among the other companies competing to takeover Jabong.
GFG on Tuesday released a press brief, stating that it “entered into a definitive agreement to sell Jabong, its Indian business, to Flipkart Group for US$70 million in cash.”
Flipkart had acquired Myntra in 2014 for about Rs. 2,000 crore. The acquisition of Jabong, which was founded in 2012, is considered to help Flipkart in strengthening its presence in fashion and lifestyle sectors.
“The acquisition of Jabong further strengthens Flipkart Group’s position as the undisputed leader in Fashion and Lifestyle segment in India. Jabong is among India’s major fashion multi-brand e-store with more than 1,500 on-trend international high-street brands, sports labels, Indian ethnic and designer labels and over 1,50,000 styles from over a thousand sellers,” Outlook India quoted Myntra as saying in a statement.
Flipkart released a statement on Tuesday stating that Myntra and Jabong will together have a monthly active user base of 15 million.
“This acquisition is a continuation of the group’s journey to transform commerce in India. I am happy that we will now be able to offer to millions of customers a wide variety of styles, products and a broad assortment of global as well as Indian brands,” the Indian Express quoted Flipkart co-owner Binny Bansal as saying.
GFG was in talks with suitable buyers to sell Jabong for a long time now as the fashion e-retailer was reportedly incurring losses.
According to the IE report, of the 10 companies operating under GFG group, only Jabong was making losses. In FY 2015, the operating loss of the company was Rs. 426 crore and the revenue growth was only 7 per cent higher than previous year (2014).
“We are grateful to the Jabong team for the great work carried out over the last several years to build such an attractive Indian fashion e-commerce company. We are pleased with the outcome of Jabong’s strategic review and will now focus all our energy and capital in driving the growth of Lamoda, Dafiti, Namshi, The Iconic and Zalora across their 24 countries of operation,” GFG Chairman Lorenzo Grabau said.