Bengaluru: Online fashion retailer Jabong reported only a 14% increase in revenue to €32.6 million in the March quarter as lower discounts curbed demand, the latest in a series of quarters of weak growth at the company that is fighting to survive.
Sales growth of 14% is considered to be poor by the standards of online retailers, which are used to seeing increases of anywhere between 80% and 200% every year. For instance, Jabong rival, Myntra, is expecting gross sales, excluding discounts, to increase by 90% to Rs.5,000 crore this year, Mint reported on Monday.
Jabong’s adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) loss for the same quarter narrowed to €11.9 million from €16.3 million in the year-ago period.
Jabong’s valuation has slumped over the past year because of an exodus of the company’s senior management, slowdown in funding and strong competition from Flipkart-Myntra and Amazon India.
In September 2014, Jabong was merged with four other international online fashion businesses by Germany’s Internet investment group Rocket Internet and Swedish investment bank Kinnevik to create a company called Global Fashion Group (GFG) that was worth €2.7 billion (around Rs.21,600 crore) then. In April, GFG said it is now valued at just $1.13 billion (€1 billion), implying that Jabong’s worth has slid from the previously disclosed €388 million at the end of 2013.
Jabong was worth €388 million in December 2013, and it was one of the most valuable companies owned by Rocket Internet. Rocket Internet, which has large stakes in more than 60 e-commerce firms across Africa, Asia and Latin America, went public in Germany at a valuation of more than $8 billion in October 2014.
Late last year, to turn around its business, Jabong hired a new senior management team including a new CEO, Sanjeev Mohanty, from Benetton India.
Around the same time, Jabong hired investment bank Avendus in a bid to attract independent capital from private equity partners or strategic investors, Mint reported on 3 May. But the company is nowhere near a turnaround and it has been struggling to attract a buyer or raise money, Mint reported then.