Jabong, an online fashion retailer, is reportedly in talks to sell stake in the company to India’s second largest online retailer Snapdeal.
“At any time, anyone who wants to look at raising money in this market, or is thinking about getting a strategic partner on board, comes and talks to us. We are always considering companies in every space because it is important for us to keep growing our ecosystem. The specifics, though, I can discuss later,” Snapdeal co-founder & chief executive Kunal Bahl said.
According to business daily ; Global Fashion Group (GFG), the company that owns Jabong, has been in talks with a number of probable investors for some time now.
Sources said talks of selling out Jabong had started as the fashion portal had been making losses.Jabong recorded a five-fold increase in losses during the calendar year 2014 due to high discounts on its offerings, although its revenue growth went up by 136%.
Also, online retailer Amazon India’s discussions with Jabong last year to acquire the firm were unsuccessful on the grounds of valuation. Jabong reportedly asked for a valuation of $1.2 billion.
According to sources, Snapdeal would like to add an online fashion and lifestyle portal, and that is the reason it could be open to buying out Jabong. “Adding a fashion portal would help Snapdeal tackle Myntra in a major way. However, talks are at a nascent stage,” said a senior official .