Myntra buys Jabong for $70 mn to refocus biz

Post acquisition, the monthly active user base will be 15 million

Leading e-tailer Flipkart-owned Myntra on Tuesday announced acquiring e-store Jabong from its London-based owners Global Fashion Group (GFG) for US $70 million (Rs 471 crore) to consolidate its position in the fashion and lifestyle segment both operate in. Though Flipkart and Myntra did not announce the acquisition cost, GFG said in a statement from Luxembourg that it had entered into an agreement to sell Jabong to Flipkart group for US $70 million in cash.

“The transaction is a decisive step in our strategy to refocus business on core markets and accelerate on our path to profitability,” GFG said in its statement. The transaction is subject to customary closing conditions and is expected to close during the third quarter of this year, reports IANS.

Gurgaon-headquartered Jabong is a major fashion multi-brand e-store with 1,500 global brands, sports labels and Indian ethnic and designer labels. “Post-acquisition, Myntra and Jabong will have a combined base of 15 million monthly active users, offering best of brands to Indian consumers,” Myntra said in a statement. Bengaluru-based Flipkart acquired Myntra in May 2014 for an estimated US $300 million. “Following a strategic review of our Indian operation, the board concluded that Jabong’s position as India’s leading fashion ecommerce destination would be best served through a business combination with a local player. The board has resolved to sell Jabong to Flipkart group,” GFG said in the statement. Besides apparel, Jabong.com sells footwear, fashion and home accessories, beauty products and fragrances. “Over the last 12 months, all our operations have improved customer experience and economics. Through the sale of Jabong, we are achieving a milestone in our strategy to refocus and invest in our core markets that show growth and revenue potential and a predictable path to profitability,” said GFG Chief Executive Romain Voog. Both the e-commerce platforms will jointly hard-sell iconic global brands, including Dorothy Perkins, Topshop, Tom Tailor, G Star Raw, Bugatti Shoes, The North Face, Forever 21, Swarovski, Timberland and Lacoste. “Jabong’s acquisition is a continuation of our group’s journey to transform commerce in India. We will offer a variety of styles, products and assortment of global and Indian brands,” said Flipkart cofounder and Chief Executive Binny Bansal in the statement. “Acquisition of Jabong is a step in our journey to be the country’s largest fashion platform, as it has built a strong brand, which is synonymous with fashion, a loyal customer base and global brands,” said Myntra’s Chief Executive Ananth Narayanan. As a pioneer in mobile-commerce play, the city-based Myntra has partnership with 2,000 global brands, including Nike, Adidas, Puma, Levi’s, Wrangler, Arrow, Jealous 21, Diesel, CAT, Harley Davidson, Ferrari, Timberland, US Polo, FabIndia and Biba to offer a range of latest fashion and lifestyle wear. The US $10-8 billion GFG was founded in 2014 through the merger of six-growth-market oriented businesses spanning fashion and accessories, worldwide. GFG sells Lamoda brand in Russia, Dafiti in Latin America, Namshi in the Gulf region, The Iconic in Australia and New Zealand and Zalora in South East Asia.