Rocket Internet-owned online fashion retailer, Jabong.com is supposedly going under the hammer as it’s parent company Global Fashion Group (GFG), is considering selling the e-commerce fashion store, as per a report by Mint.
Cofounded by Rocket Internet and Swedish Investment firm AB Kinnevik, GFG is currently in talks with online payment service provider and one of India’s most aggressively growing companies PayTM, to finalise the buyout process.
Although it’s hard to put a final market value on Jabong.com early on in the buyout process, analysts expect the company to be worth at least $800 million. That however, may be well affected by the kind of losses Jabong has been registering.
Last year GFG had initiated a buyout deal with Amazon India, which had expressed interest in buying Jabong.com. The deal, however, was washed out as Amazon backed off following a $1.2 billion valuation for Jabong.
The Gurgaon headquartered fashion and lifestyle retailer had earlier named Nils Chrestin, chief financial officer at GFG, as the head of buying and sourcing functions following the exit of co-founder and CEO Arun Chandra Mohan to pursue a new business venture.
It’s other co-founder Praveen Sinha is also expected to leave at the end of this year.
GFG was created following the merger of Jabong with four other online fashion retailers in Latin America, Russia, Middle East, Southeast Asia and Australia in September last year. AB Kinnevik, who owns more than 25 percent shares in GFG, and is said to be propelling the buyout process.
Jabong.com has lost a significant share of the online fashion market following the acquisition of Myntra by Flipkart.
The other significant share owner of GFG is Rocket Internet with 21% of shares. It too wants to wash it’s hands of the loss making store, which registered a loss of ₹454 Crore during the last fiscal year.