Online fashion e-tailer Jabong (Jade Eservices Pvt Ltd), owned by Flipkart has reported a 19% year-on-year (YoY) jump in revenues at Rs204.6 crore for the financial year ended March 2019 (FY19), according to documents sourced the registrar of companies (RoC).
The e-tailer’s net losses also narrowed down to Rs179 crore in FY19, compared to losses of Rs188 core reported a year ago, on account of lower expenses. In FY19, Jabong reduced total expenses by 6% year-on-year to Rs417 crore. The company’s expenses have been reducing steadily since FY16, especially after it was acquired by Myntra (Flipkart company) in July 2016 from Rocket Internet for $70 million.
However, Jabong’s employee, and finance expenses went up considerably in FY19, with an increase of 22% and 140% year-on-year, respectively. Most of the reduction was reported in the other expenses category which decreased by 20% year-on-year to Rs289.7 crore in FY19, compared to Rs362 crore in FY18.
Jabong had reportedly weakened Walmart’s earnings in the third quarter (Q3, 2020) to the tune $290 million in non-cash impairment charges. Walmart, which acquired a controlling stake in Flipkart in May 2018, had decided to merge both Myntra and Jabong’s back office operations in the end of last year, according to a company statement.
“Excluding the impairment charge related to Jabong, third quarter International operating income was better than plan, but declined 16 percent year-over-year in constant currency and 21 percent on a reported basis due primarily to the expected dilution from Flipkart as well as the overall gross margin and FX pressure," Walmart Inc’s chief financial officer Brett Biggs said in a statement during the third-quarter results.
Just days after Flipkart’s sale to Walmart, Jabong laid-off 150-200 employees in November 2018. Although the Jabong website continues to exist, traffic from the website is currently being re-directed to Myntra. Following the lay-offs and structural changes in Jabong, Myntra’s chief executive Ananth Narayanan officially resigned from the company in January 2019.
Flipkart veteran Amar Nagaram was named the new head of Jabong.