Competition between Snapdeal and Furture Group to buy Jabong at 1/5th asking price
Snapdeal and Kishore Biyani’s Future Group have emerged as finalists for buying Jabong. They have offered 1/5th of asking price, and other players like Flipkart and Abof have drop out of this competition.
The original asking price was $200 Million, but sources aware of this situation confirmed that offered price is less than $50 Million.
While Snapdeal is said to be interested in a cash-cum-stock transaction, Future Group has offered an all-cash deal. Both these offers have been formally made to the GFG board. Future Group could further acquire retail market by going online through Jabong.
Apart from this development, another major development is the resignation of Sanjeev Mohanty, CEO of Jabong. The board has accepted his resignation. When asked about this move, Sanjeev denied it. Internal sources of Jabong have confirmed this move though.
Sanjeev said “I am very much here in Jabong. The new team I have hired is fully engaged. We are delivering very good results ahead of expectations.”
Sanjeev’s news leaving the company going public will cause insecurity to investor especially during the sale of the e-commerce. This is the major reason for his denial says the same source within Jabong.
Sanjeev was brought in October last year to sail the drowning ship, but this sale clearly shows that he was not successful to sail it to the shore. Last week media has reported him joining as India head of denim giant Levi’s.
Prior to joining this e-commerce platform, Mohanty worked with Benetton for 11 years, and also led some of Madura Fashion & Lifestyle’s key brands.
I personally am very dishearten with Jabong’s customer service. When ordered clothes few months back, I received either faded or torn ones. Future Group can save the brand name of Jabong and provide the same service and quality through e-commerce that they provide through brick and motor stores.