E-commerce player Flipkart is strengthening its fashion and lifestyle foray with the nearly $70-million acquisition of Jabong. The acquisition has been done through the e-tailer's existing fashion portal, Myntra, which Flipkart had acquired in 2014.
The company is looking to tap Jabong's unique strengths and further the group's growth, Myntra's Chief Executive Officer, Ananth Narayanan told BloombergQuint.
Jabong has a 4 million strong customer base. It is strong in the women's segment and in the Delhi NCR region.The purpose of this acquisition is growth. We have done the deal because we think it is a good one.Ananth Narayanan, CEO, Myntra
The two companies have signed the deal and other formalities will be completed shortly. Myntra's team has already started working along with Jabong's management and the two companies will continue to operate as separate entities going forward, Narayanan said.
On the estimated combined sales of Myntra and Jabong after this deal, he said, “It is too soon to tell what will be the value of synergies and capabilities that we are leveraging from each other. We will know in a few months' time.”
Myntra will not seek fresh capital post this deal. Myntra is part of the Flipkart group and they have funded the acquisition, Narayanan added.
Jabong's net revenues rose 14 percent to 32.6 million euros for the quarter ended March 31, 2016. It clocked revenue of Rs 869 crore and adjusted earnings before interest, tax, depreciation and amortisation loss of Rs 426.4 crore for the year ended December 31, 2015.
Also Read: Flipkart-Owned Myntra Acquires Jabong in $70 Million Deal
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