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Jabong owner in initial talks with Paytm, others to sell online retailer

  • Global Fashion Group, the company that owns India’s
    Jabong.com, is in initial talks with payment services provider Paytm to sell
    the online fashion retailer, the
    Mint
    reported citing sources in know of the development.
    • Global Fashion Group, the company that owns India’s
      Jabong.com, is in initial talks with payment services provider Paytm to sell
      the online fashion retailer, the
      Mint
      reported citing sources in know of the development.
    •  

    •  
    • AB Kinnevik,
      the largest shareholder of GFG, is speaheading the sale process and is reaching
      out to other potential suitors for selling Jabong. Kinnevik is also negotiating
      on behalf of Rocket Internet, which owns more than 21% of GFG. It wants to sell
      its stake in the money-losing Indian fashion store ahead of GFG’s proposed
      stock market listing, the sources told
      Mint.
    •  

    •  
    • The talks
      are at a very early stage and the valuation of Jabong is being pegged at
      anywhere between $500 million and $800 million.
    •  
    • Jabong,
      which matched larger rival Myntra in sales until early 2014, has ceded market
      share in the past 15 months or so as Myntra’s parent Flipkart has been pumping
      in hundreds of crores in advertisements and discounts to lure customers.
    •  
    • If the stake
      sale by GFG goes through, this could be one of the largest deals in the Indian
      online fashion industry after Flipkart’s purchase of Myntra in May 2014.
    •  
    • Jabong had
      been looking for a new chief executive as co-founders Praveen Sinha and Arun
      Chandra Mohan are exiting the company, amid mounting pressure to improve the
      financial metrics of the online retailer.
    •  
    • In late
      2014, online marketplace Amazon India held early talks with Jabong for a
      potential buyout. However, the deal fell through at the beginning of 2015 after
      Jabong asked for a $1.2 billion valuation, according to a
      VCCircle report.
    •  
    • Jabong had earlier
      this month shut its design office in London and shifted it to India under
      pressure from its parent to focus on cutting losses.
    •  
    • The online
      retailer currently offers more than 190,000 products from 1,800 brands,
      including well-known international brands and its own labels. Since the start
      of 2015, investors have pumped in more than Rs 300 crore into Jabong.

     

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