Fashion, beauty and lifestyle e-tailer Myntra has agreed to acquire rival Jabong from Global Fashion Group for US$70m in cash.
The acquisition will result in the creation of India’s largest fashion shopping destination and will make Flipkart Group – the parent company of Myntra – a leader in the fashion, beauty and lifestyle segment in the region.
Both Myntra and Jabong stock a wide variety of cosmetics and fragrance brands including: Nina Ricci, Burberry, Lakmé, NutriGlow, Age Lock, Vichy and Pond’s, among many others.
Global Fashion Group explained it decided to sell Jabong after the Board conducted a strategic review of its Indian operation. The decision was made that Jabong would benefit from being owned by a local player.
Between the two companies, the sites have access to more than 15 million monthly active users. Binny Bansal, CEO and Co-Founder, Flipkart, said: “Fashion and lifestyle are the biggest drivers of ecommerce growth in India. We have always believed in the fashion and lifestyle segment and Myntra’s strong performance has reinforced this faith. This acquisition is a continuation of the group’s journey to transform commerce in India.”
Meanwhile, Romain Voog, CEO of Global Fashion Group, said: "Over the last 12 months, all of Global Fashion Group’s operations have significantly improved their 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 both, significant growth and revenue potential but also a clear and predictable path to profitability. With a strengthened balance sheet, we are now uniquely positioned to continue investing to deliver unparalleled shopping experience and best in class service to our customers and partner brand-owners across all of our countries."
Jabong made net revenues of €126m and adjusted EBITDA of €56m for the 12 months ended March 31, 2016.
Myntra sells its Indian and international brands to more than 19,000 pin codes across India, with cash on delivery and a 30-day exchange/returns policy. It has partnered with more than 2000 fashion and lifestyle brands in India.
