Since becoming integrated into the Global Fashion Group (GFG) last April, we have heard a lot of rumours about Jabong’s strategy and objectives. When will it break-even? Is it aiming for profitability? Is it being sold to Snapdeal or maybe Amazon? What to make of the change in management at the senior level?
Jabong is operated by Xerion Retail, which achieved the Rs. 1,000 crore sales revenue figure in March 2015, although its losses increased from Rs. 16.6 crore to Rs. 43.6 crore annually.
It recently came to light that the Future Group CEO & founder, Kishore Biyani was interested in purchasing Fabfurnish, but not sister concern Jabong. This got everyone in the industry wondering, what exactly does the future hold for Jabong?
It has now been reported that the Global Fashion Group is going to plough in a further $20 million to resuscitate the ailing fashion etailers fortunes, which for a period was giving online fashion leader, Myntra a run for its money. It is understood that Jabong has to show a certain level of progress in the next 12 months to keep its head above water.
“The board has agreed to put more than $20 million in Jabong,” said a person who was part of the meeting in Luxembourg.
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The Global Fashion Group is made up of Investment AB Kinnevik (Sweden based) and Rocket Internet (Germany based). It controls a diverse stable of ecommerce investments which includes:
With the future of the Indian ecommerce market considered to possess a very healthy future, it is no wonder a global ecommerce player like GFG continues to back Jabong, although the question mark remains for how long. It is understood that Kinnevik were in favour of keeping Jabong, while Rocket Internet were not so keen.
While insiders see this injection of cash as one last throw of the dice for Jabong, GFG reiterates that it remains committed to Jabong and this was part of regular funding.
“GFG has raised over $1.5 billion in capital in its history and its Board remains unanimously committed to all regions it operates in, including India. Jabong has made a number of recent senior management hires and has also recently witnessed record operating performance. These facts, which are supported by public filings on our current investment rate, are clearly evident of GFG’s commitment to growing Jabong,” stated an email from the company.
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